Shares of Billionbrains Garage Ventures Ltd., the parent company of discount broking platform Groww , surged as much as 10% on Friday, January 16, extending their rally following positive brokerage commentary and strong December quarter results. The stock momentum was driven by robust financial performance and a significant strategic investment announcement.

Strong Brokerage Support Drives Rally

Motilal Oswal maintained its 'Buy' rating on Groww and revised its price target upward to ₹190 per share. The brokerage highlighted the company's continued delivery of strong revenue growth, driven by rising user adoption across products and robust user activation. The firm noted that Groww's broking business is gaining market share across segments, supported by recent product launches including margin trading facility (MTF) and commodities trading.

The brokerage emphasized that the rising number of affluent customers is creating wealth management opportunities, with the ongoing integration of Fisdom expected to further strengthen this segment. Motilal Oswal raised its FY27 and FY28 EPS estimates by 2% each, factoring in strong expansion in the MTF book and better-than-expected rollout of the commodities segment.

State Street's Strategic Investment in Groww AMC

In a significant development, State Street announced a ₹580 crore investment in Groww AMC for a 23% stake. State Street, the world's fourth largest investment manager with $5.50 trillion in assets under management, structured the deal as follows:

The investment is strategically significant as it brings global expertise in passive and quantitative strategies to Groww while allowing the company to retain control through capped voting rights. The AMC currently manages assets worth ₹4,119.00 crore. Groww had acquired the AMC from Indiabulls in 2023 for ₹175.00 crore.

Impressive Q3 Financial Performance

Groww reported strong Q3 results marked by healthy growth across key metrics and rapid expansion in the MTF book. The company recorded its highest number of user additions in a year, demonstrating strong customer acquisition momentum.

*EBITDA declined year-on-year due to a high base in Q3FY24, which included a one-time reversal of ₹425.00 crore in long-term leadership incentive costs following the company's redomiciling exercise.

Adjusted Performance Metrics

When accounting for one-time items, the company's underlying performance showed consistent growth:

• Adjusted EBITDA: Rose 24% to ₹710.00 crore
• Adjusted Profit After Tax: Increased 24% to ₹547.00 crore

The MTF book's 38% sequential expansion was particularly noteworthy, aided by market share gains from a low base, indicating strong traction in margin trading services.

Market Response and Current Trading

Shares of Billionbrains Garage Ventures were trading 7.58% higher at ₹176.80, reflecting strong investor confidence in the company's growth trajectory and strategic partnerships. The stock's performance brings it back near post-listing highs, supported by both operational excellence and strategic value creation through the State Street partnership.

Groww parent company Billionbrains Garage Ventures reported mixed Q3 FY26 results, with consolidated net profit declining 27.8% year-on-year to ₹546.93 crore from ₹757.11 crore in the corresponding quarter last year. The decline was primarily attributed to a one-time tax-adjusted gain of ₹315 crore recorded in Q3 FY25, making the current quarter's performance appear weaker on a comparative basis.

Financial Performance Overview

Despite the headline profit decline, the company's operational metrics showed robust growth. Revenue from operations increased 24.8% year-on-year to ₹1,216.07 crore, compared with ₹974.53 crore in the corresponding quarter of FY25. Operating PAT demonstrated strong momentum, rising 24% to ₹546.93 crore from ₹442 crore in the previous year.

Market Share Expansion

Groww significantly strengthened its market position across key business segments during the quarter. The company's share in the stock market rose to 28.8% from 21.6% a year ago, while its share in equity derivatives increased substantially to 18.1% from 12.2%. These gains reflect the platform's growing popularity among retail investors.

Average daily turnover metrics further highlighted the company's expanding business scale:

Mutual Fund Business Growth

The mutual fund segment delivered impressive performance with SIP inflows increasing 30% year-on-year to ₹12,328 crore in Q3 FY26 from ₹9,476 crore in Q3 FY25. Groww's market share in mutual funds improved to 13.7% from 12.3% during the same period, demonstrating the platform's success in capturing a larger portion of the growing SIP market.

The company also announced plans to acquire additional shares in Groww Asset Management Limited (Groww AMC), which remains its wholly owned and non-material subsidiary.

Analyst Recommendations

Following the Q3 results, leading brokerages maintained positive outlooks on Groww's prospects:

Motilal Oswal retained its 'Buy' rating and raised the target price to ₹190 from ₹185, citing robust revenue growth and margin expansion potential. The brokerage highlighted that Groww's improving EBITDA margins are driven by strong topline performance and operating leverage from largely fixed costs. Management guidance indicates employee and marketing expenses are expected to rise 10-20%, but continued revenue growth could result in further margin expansion.

Citi Research initiated coverage with a 'Buy' rating and ₹190 target price, emphasizing Groww's transition to a one-stop platform for financial products distribution. The brokerage noted the company's customer-centric approach, first-mover advantage in direct mutual funds, and lean operating structure. Citi forecasts EPS CAGR of 35% over FY2026-FY2029, with adjusted EBITDA margin estimated at 69.3% by FY2029E.

Both brokerages raised their EPS estimates for FY27 and FY28 by 2% each, taking into account strong expansion in Groww's margin trading facility book and better-than-anticipated commodities segment launch.