Groww shares rally 7% as brokerages remain split on valuation outlook, Jefferies assigns buy, JM Financial flags sell rating

Billionbrains Garage Ventures (Groww) shares zoomed 7 per cent in early trade on Monday.

The sharp move in the stock comes amid contrasting views from brokerages, with Jefferies initiating coverage with a bullish stance, while JM Financial has flagged valuation concerns and initiated with a sell rating.

At 11.49 am, the stock was trading 5 per cent higher at ₹169, after hitting an intraday high of ₹172.50 on the NSE, compared with the previous close of ₹160.87.

Jefferies: Buy on growth levers and margin expansion

Jefferies has initiated coverage on Groww with a buy rating, citing its rapid rise to become India’s largest broker by active clients in a relatively short period. The brokerage stressed that Groww is well placed to deliver strong earnings growth over the medium term, driven by steady gains in market share, improving monetisation of its client base and expansion into newer products.

According to Jefferies, Groww’s business model resembles that of global peer Robinhood, where product velocity and cross-selling play a key role in driving revenue growth. The initiatives such as margin trading facilities and wealth management to meaningfully scale up over the next few years, contributing a higher share of revenues.

On valuation, Jefferies believes the stock still trades at a discount to comparable global peers despite superior growth prospects, justifying its positive outlook.

It expects margins to contract in FY26 estimates, due to lower broking revenues & wealth management acquisition being break-even. “However, expect 700bps expansion from FY26e trough led by: ramp up of new products, increasing ARPU, marketing spend being similar to other internet peers,” it added.

JM Financial: Sell on valuation and regulatory risks

In contrast, domestic brokerage JM Financial has initiated coverage on Groww with a sell rating, arguing that the stock is expensive for what is still predominantly a broking-led business. While acknowledging Groww’s strong customer acquisition and rapid scaling, JM Financial pointed out that a large majority of the company’s revenues continue to come from broking-related activities, including trading fees, margin trading and client float.

JM Financial remained cautious about the sustainability of this revenue mix, especially in light of regulatory actions that have already impacted derivatives volumes in the past. It believes that while wealth management and lending businesses can grow over time, they are unlikely to materially reduce Groww’s dependence on broking revenues in the near term.

The brokerage has also highlighted key-person risk given the founder-led management structure. On valuations, JM Financial argued that Groww should trade closer to listed domestic broking peers rather than asset-light wealth managers, leading it to see downside risk from current levels.

With brokerages sharply divided on growth visibility and valuation comfort, Groww shares are likely to remain sensitive.

Published on December 22, 2025