Groww hits record high after 18% rally: Hold or sell?

Groww hits record high after 18% rally: Hold or sell?

Billionbrains Garage Ventures, the parent company of Groww, has witnessed a sharp surge in its shares.

The stock hit an all-time high of ₹197 on Friday, gaining over 5% in value. The rally has continued for three consecutive sessions, surging 18% over this period.

Today's surge was backed by strong volumes with nearly two crore shares traded in the first hour alone.

Dominance in discount broking space

Groww, the largest broker in terms of active clients, has a 28% market share. This is way ahead of the second-largest player with just 15%.

The company's dominance can be attributed to its strong mutual fund funnel, user-friendly UI/UX design, and strong word-of-mouth traction.

These factors have all contributed to the impressive performance of Billionbrains Garage Ventures' shares over recent months.

Positive outlook from JPMorgan

Last month, JPMorgan initiated coverage on Groww with an 'overweight' rating and a price target of ₹210 per share.

The brokerage called Groww the most lucrative India-listed consumer internet platform, thanks to its consistent market share gains and strong appeal among aspirational investors.

It also highlighted the company's strong cross-sell and operating leverage capabilities that could help it outgrow the overall market.

Revenue growth amidst profit decline

Despite a 27.8% year-on-year decline in consolidated net profit to ₹546.93 crore, Groww's revenue from operations saw strong growth.

It rose 24.8% year-on-year to ₹1,216.07 crore, up from ₹974.53 crore in the same quarter last year.

JPMorgan noted that while Groww may seem expensive as a discount broker, it looks attractively valued as a broader internet platform.