The News
Groww’s shares surged as much as 9.37% in intraday trading on April 15, reaching a fresh 52-week high of ₹212.95 on the BSE after Bank of America (BoFA) initiated coverage with a “Buy” rating. The stock later pared gains and was trading 6.52% higher at ₹207.40 around 12:00 IST, with a market capitalization of ₹1.30 lakh crore (about $13.99 billion), according to Inc42 Media.
BoFA’s Valuation Framework
BoFA set a ₹235 price target while initiating coverage with a “Buy” rating, implying 21% upside from the last close. The brokerage said Groww is positioned to benefit from India’s retail investing tailwinds and projected a 30% revenue CAGR over FY26–FY28.
BoFA highlighted Groww’s profitability as “best-in-class” and noted potential upside from operating leverage. According to the brokerage’s model, operating leverage could drive EBITDA and PAT margins to 67% and 52%, respectively, by FY28E. BoFA valued Groww at 39X its FY28E price-to-earnings multiple.
Risk Factors
BoFA flagged weak capital market performance and the expiry of the six-month lock-in period as near-term risks to the stock’s valuation. These factors could affect user activity and revenue patterns.
Analyst Coverage Landscape
BoFA’s initiation adds to earlier analyst coverage. JPMorgan initiated coverage last month with an “Overweight” rating and a ₹210 price target, describing Groww as one of the most attractive India-listed consumer internet platforms. UBS initiated coverage with a “Neutral” rating and a ₹185 price target.
The range of ratings and price targets reflects differing views on how quickly platform economics should improve and the extent of margin expansion.
Broader Market Context
Other brokerage and capital market-linked stocks also moved higher on the day. Angel One rose about 6.13% to an intraday high of ₹297.90. The BSE Sensex rose 1.85% to an intraday high of 78,270.42, and the Nifty 50 gained 1.84% to touch 24,280.90.
Recent Financial Performance
Groww reported a 28% decline in net profit to ₹547 Cr in Q3 FY26 from ₹757 Cr in the year-ago quarter. On a sequential basis, net profit rose 16% from ₹471.3 Cr. Operating revenue stood at ₹1,216.1 Cr, up 25% YoY and 18% QoQ.
The combination of revenue growth alongside year-over-year net profit decline underscores why analyst models focusing on margin expansion and operating leverage are relevant to forward valuation.
Source: Inc42 Media