Billionbrains Garage Ventures Ltd, operating as the discount brokerage Groww, reported impressive financial results for the first quarter of fiscal year 2027. The company's operating revenue increased by 66% year-on-year, reaching approximately Rs 1,500 crore, aligning with analyst expectations.
MOFSL Reiterates 'Buy' Rating for Groww
Following Groww's strong performance, MOFSL (Motilal Oswal Financial Services) reiterated its 'Buy' rating on the stock. The brokerage firm has revised its Groww share price target upwards to Rs 250, based on 38 times its estimated FY28 earnings per share (EPS).
MOFSL highlighted Groww's consistent year-on-year revenue growth, driven by increasing user engagement with its diverse product offerings and effective user activation strategies. The brokerage business is reportedly expanding its market share across various segments.
Key Growth Drivers and Operational Efficiency
Recent product introductions, including the Margin Trading Facility (MTF) and commodities trading, are significant contributors to Groww's continued expansion. MOFSL projects that overall order volumes in the broking segment will grow by over 20% between FY27 and FY28, fueled by market share gains and improved revenue per order. Additional growth is expected from the MTF segment, Loan Against Shares (LAS), and wealth management services.
Groww's Q1 FY27 results also showed enhanced operational efficiency. Operating expenses increased by 26% year-on-year, which was below MOFSL's estimates. Employee expenses rose 33%, while other expenses saw a 23% increase, also coming in below estimates. The company's EBITDA more than doubled year-on-year, with the EBITDA margin improving to 64.6%, up from 53.4% in Q1 FY26 and exceeding MOFSL’s projection of 63.1%.
Profit after tax for the quarter surged by 94% year-on-year and 7% quarter-on-quarter, surpassing MOFSL's estimates by 12%. Management commentary indicated that established business segments are generating increased operating leverage, with new products largely developed by existing teams, suggesting a stable overall cost structure going forward.
Improving Customer Quality and Future Plans
Groww's management noted an improvement in customer quality, with users acquired in FY26 generating higher Average Revenue Per User (ARPU) compared to earlier cohorts. This trend indicates a maturing customer base and more profitable engagement.
Looking ahead, MOFSL reported that Groww is currently testing US stock trading capabilities, with an imminent launch focused on US equities. The company plans to evaluate expansion into other international markets based on customer demand. Regarding regulatory developments, Groww's management anticipates no material impact on retail participation from the RBI's tighter bank guarantee norms for proprietary trading, attributing recent market shifts to lower volatility stemming from easing geopolitical tensions.
Overall, MOFSL maintains its positive outlook on Groww stock, citing sustained revenue growth, market share gains, and robust operational efficiency after the Q1 results.