Groww, India's largest stockbroker by active clients, reported a 54 per cent jump in second-quarter profit, showing that its earnings engine has become more diversified even as income from equity derivatives trading, once the industry's most lucrative product, comes under sustained pressure.
Billionbrains Garage Ventures, the listed parent of Groww, reported consolidated net profit of ₹724.7 crore for the July–September quarter of fiscal 2027, up from ₹471.3 crore a year earlier, according to figures reported by Inc42. Some outlets rounded the figure to ₹725.6 crore. Revenue from operations rose 47.4 per cent year on year to ₹1,501.5 crore, from ₹1,018.7 crore.
The headline growth was strong, but the sequential picture was flatter. Profit slipped about 1.4 per cent from ₹735 crore in the April–June quarter, and operating revenue was essentially unchanged from the previous quarter's ₹1,501.4 crore.
Steady Revenue, Contained Costs
The quarter's numbers point to a business that is holding its ground rather than accelerating. Total income came in at ₹1,540.5 crore, compared with ₹1,070.8 crore a year earlier and ₹1,548.7 crore in the first quarter. Other income declined to ₹39 crore from ₹47.3 crore in the preceding quarter.
Total expenses rose 28.5 per cent year on year to ₹555.9 crore but were broadly flat quarter on quarter. Because revenue grew much faster than costs over the year, operating leverage remained firmly intact. EBITDA rose about 1 per cent sequentially to roughly ₹968 crore, and the EBITDA margin widened by 60 basis points to 64.5 per cent, according to Kotak Neo.
The slight dip in quarterly profit reflected lower other income, flat expenses and a marginally higher tax charge, rather than any deterioration in the core business.
The Derivatives Drag
The biggest headwind came from equity derivatives. The segment's share of Groww's total income fell 12.2 percentage points year on year, which the company attributed to changes in market activity following the introduction of a client-level activity framework, the latest in a series of regulatory measures aimed at curbing speculative futures and options trading by retail investors.
Indian market regulator SEBI has spent the past two years tightening rules around index derivatives after its own studies found that the overwhelming majority of individual traders lost money. Higher contract sizes, fewer weekly expiries and stricter margin requirements have reduced trading volumes across the industry and hit the revenues of discount brokers that had grown rapidly on the back of options activity.
Groww said it expects conditions to improve once recommendations from a recent SEBI consultation paper are implemented, although the timing and final shape of those changes remain uncertain.
Margin Trading and IPOs Carry the Load
Offsetting the derivatives slowdown, Groww reported improving revenue contributions from its margin trading facility (MTF), which lends money to clients to buy shares, and from commodity derivatives.
MTF has become an increasingly important earnings stream for Indian brokers. It generates interest income that is less sensitive to daily trading volumes than brokerage fees, though it also exposes brokers to credit risk if markets fall sharply and clients cannot meet margin calls.
Primary market activity also helped. About 42 lakh investors applied for equity IPOs through Groww during the quarter, giving the platform a 22 per cent share of total allotments, according to Kotak Neo. The company added 11 lakh new transacting users in the period, a reminder that its customer base continues to grow even as trading intensity among existing users changes.
