Groww Parent Stock Surges 10% on State Street AMC Deal, Q3 Beat

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AuthorAarav Shah|Published at:
Groww Parent Stock Surges 10% on State Street AMC Deal, Q3 Beat
Overview

Billionbrains Garage Ventures, Groww's parent, shares jumped 10% on strong Q3 earnings and State Street's ₹580 crore investment in Groww AMC. Motilal Oswal reiterated a 'Buy' rating, citing market share gains and growth potential. The deal brings global expertise to Groww's asset management arm.

Groww Parent Surges on State Street Investment and Strong Q3 Results

Billionbrains Garage Ventures Ltd., the parent company of discount broking platform Groww, saw its stock climb as much as 10% on Friday. This rally follows robust quarterly results and significant commentary from brokerages highlighting the company's growth trajectory.

Brokerage Optimism

Motilal Oswal maintained its 'Buy' rating and raised the price target to ₹190 per share. The brokerage firm cited strong revenue growth, driven by increasing user adoption across its product suite and consistent user activation. Groww's broking business is reportedly gaining market share, bolstered by recent launches like the margin trading facility and commodities trading.

The increasing number of affluent customers presents significant wealth management opportunities. The ongoing integration of Fisdom is expected to further strengthen this segment, positioning Groww for future expansion. Motilal Oswal adjusted its FY27 and FY28 EPS estimates upward by 2% each, reflecting anticipated growth in the MTF book and the commodities segment rollout.

State Street Partnership

Separately, State Street, a major global investment manager, announced an investment in Groww Asset Management Company (AMC). State Street will inject ₹580 crore for a 23% stake, comprising a ₹380 crore secondary purchase and a ₹200 crore primary capital infusion. Voting rights will be capped at 4.99%, ensuring Groww retains control.

This strategic investment is poised to bring international expertise in passive and quantitative strategies to Groww's asset management operations. The Groww AMC currently manages assets worth ₹4,119 crore, having been acquired from Indiabulls in 2023.

Q3 Performance Highlights

Groww reported a strong quarter marked by healthy year-on-year revenue growth and rapid expansion in its Margin Trading Facility (MTF) book, achieving its highest user additions in a year. Revenue increased by 19% quarter-on-quarter to ₹1,216 crore, with EBITDA climbing 20% sequentially to ₹710 crore. Net profit rose 16% to ₹547 crore.

Year-on-year, revenue grew 25% to ₹1,216 crore. While EBITDA saw a 29% decline compared to the prior year due to a one-time reversal of leadership incentive costs in Q3 FY25 following the company's redomiciling, adjusted EBITDA rose 24% to ₹710 crore. Adjusted profit after tax also climbed 24% year-on-year to ₹547 crore.

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