Groww’s Q2 FY27 Profit Rises 54% to ₹725 Crore as Revenue Growth Continues

Groww, the investment and stockbroking platform operated by Billionbrains Garage Ventures, reported a strong financial performance in the second quarter of FY27. The company’s consolidated net profit increased by 54% year-on-year (YoY) to ₹724.7 crore, compared with ₹471.3 crore in the same quarter last year.

Revenue from operations grew 47.4% to ₹1,501.5 crore during the September quarter, up from ₹1,018.7 crore a year earlier. The growth reflects the company’s expanding business operations and the increasing contribution of newer revenue streams, including margin trading and commodity derivatives.

However, performance was relatively flat compared with the previous quarter. Net profit declined 1.4% from ₹735 crore in Q1 FY27, while operating revenue remained almost unchanged. Total income, including other income, stood at ₹1,540.5 crore.

Revenue Growth Supports Higher Profitability

Groww’s earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 60% year-on-year to ₹969 crore, compared with ₹604 crore in the corresponding quarter last year. On a quarter-on-quarter basis, EBITDA edged down slightly from ₹971 crore.

Total expenses increased by 28.5% to ₹555.9 crore, up from ₹432.6 crore a year earlier. Despite this increase, revenue grew at a faster pace, helping the company improve its profitability.

The slight decline in quarterly profit was partly due to lower other income, which fell from ₹47.3 crore in the previous quarter to ₹39 crore. Higher tax expenses also contributed to the sequential decline.

Equity Derivatives Face Pressure

Although Groww recorded strong overall growth, its equity derivatives business experienced some pressure during the quarter. Revenue from this segment declined 14.3% compared with the previous quarter.

The company attributed much of the decline to the introduction of the Closing Auction System (CAS), which changed how closing prices are determined for eligible stocks in the futures and options (F&O) segment.

The Securities and Exchange Board of India (SEBI) introduced the system on August 3, replacing the earlier volume-weighted average price method for determining closing prices.

Groww said the decline in its equity derivatives revenue was broadly in line with the wider industry trend. The company also indicated that proposed regulatory changes could help normalise trading activity in the segment.

Newer Businesses Help Diversify Revenue

Growth in margin trading and commodity derivatives helped offset the pressure on equity derivatives, allowing Groww to maintain relatively stable operating revenue compared with the previous quarter.

The margin trading facility (MTF) accounted for 10.1% of the company’s total income in Q2 FY27, up from 8% in Q1. Commodity derivatives also increased their contribution, rising to 6.2% from 4.9%.

In contrast, equity derivatives accounted for 44.8% of total income, down from 51.9% in the preceding quarter.

The company also benefited from higher other operating income, supported by strong activity in the primary market during the quarter.

Stocks remained an important part of Groww’s business, contributing 17.4% of total income. Brokerage accounted for approximately 70–75% of revenue from its stocks business, with the remainder coming from depository charges, pledge fees and other services.

Groww expects businesses such as margin trading and commodity derivatives, which still have room to expand, to contribute a larger share of its income in the coming quarters.

Technology Costs Push Up Expenses

Groww’s operating expenses rose during the quarter, partly because of higher technology and computing costs. The company attributed the increase to a greater number of trading days, inflation in computing expenses associated with artificial intelligence and other factors, and one-time reimbursements to clients.

The reimbursements amounted to ₹13 crore and followed an operational issue involving a third-party market infrastructure institution.

Groww expects technology costs associated with inflation and computing requirements to remain part of its ongoing operating expenses. This makes cost management an important consideration as the company continues to expand its platform and product offerings.

Capital Allocation and Wealth Management Expansion

Groww continued to invest in its lending and financial services businesses during the first half of FY27. It deployed ₹1,915 crore across its margin trading facility, personal loans and loans against securities. The company also repaid ₹203 crore in debt during the period.

In September, Groww received ₹580 crore from State Street Investment Management through an investment in its mutual fund business, Groww Asset Management Company (AMC).

After accounting for operating cash generation, the investment inflow and capital deployment, the company reported a cash balance of ₹3,849 crore at the end of the first half of FY27, compared with ₹3,893 crore at the beginning of the period.

Groww AMC also recorded significant growth. Its assets under management (AUM) increased 145% year-on-year to ₹7,179 crore, up from ₹2,928 crore. The share of actively managed assets rose to 57% from 47% over the same period.

Revenue at Groww AMC grew 131% year-on-year, although the business reported a net loss of ₹8.3 crore during the quarter.

The company also completed the integration of Fisdom, expanding its ability to offer wealth management products through its platforms.

Outlook

Groww’s Q2 FY27 results highlight the strength of its overall business growth, with higher revenue and profitability supported by an expanding range of financial products. The growing contributions from margin trading, commodity derivatives and asset management have helped the company reduce its dependence on equity derivatives.

At the same time, the sequential decline in profit, pressure on equity derivatives revenue and rising technology costs point to challenges that could influence its performance in the coming quarters.

As Groww continues to expand its lending, wealth management and investment offerings, its ability to diversify revenue sources while managing operating costs will remain important to sustaining growth.