Groww Shares Dip on Flat Q3 Margins, Citi Sees Upside

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Overview

Billionbrains Garage Ventures Ltd. (Groww) posted mixed Q3 results. Net profit rose 16% to ₹547 crore, and revenue climbed 19.4% to ₹1,216 crore. However, EBITDA margins remained flat at 59%. The stock fell 2.8% to ₹158.1, despite brokerage Citi initiating coverage with a 'buy' rating and ₹195 target.

Quarterly Performance Metrics

Billionbrains Garage Ventures Ltd., operating as Groww, saw its stock decline on Wednesday following the release of its December quarter financial results. The company reported a 16% sequential increase in net profit, reaching ₹547 crore from ₹471 crore in the prior quarter. Revenue also saw a significant jump, growing 19.4% quarter-on-quarter to ₹1,216 crore.

EBITDA for the period rose by 19% to ₹720.3 crore. Despite these top-line and bottom-line gains, the firm's EBITDA margin held steady at 59%, mirroring the figure reported in the September quarter. This lack of margin expansion coincided with a notable reaction in the stock.

Market Reaction

Shares of Billionbrains Garage Ventures Ltd. experienced a downturn, trading 2.8% lower at ₹158.1 by day's end. The stock's volatile movement followed the earnings announcement, indicating investor focus on profitability metrics beyond headline growth figures.

Brokerage Initiates Coverage

Adding a contrasting perspective to the day's trading, brokerage firm Citi initiated its coverage on Groww. The firm issued a 'buy' recommendation, setting a price target of ₹195 per share. This suggests an optimistic outlook from analysts regarding the company's future prospects, despite immediate concerns over margin performance.

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