Groww Q2 Results: Cons net profit surges 54% YoY to Rs 726 crore; revenue jumps 47%

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The company’s revenue from operations came in at Rs 1,501 crore, marking a 47% increase from Rs 1,019 crore posted in the corresponding quarter of the previous financial year.

EBITDA on a sequential basis gained 1% to Rs 968 crore from Rs 960 crore in the first quarter. Margins over the same period improved by 60 basis points to 64.5% from 63.9% in the previous quarter.

Following Q2 results, Groww shares were little changed, down half a per cent at Rs 193 apiece on the BSE.

During the quarter, Groww added 11 lakh new transacting users (NTUs), driven by primary market activity. Around 42 lakh users applied for equity IPOs through the platform, giving it a 22% share of total allotments.

The company saw increased contributions from most products, including margin trading facility (MTF) and commodity derivatives. However, the contribution of equity derivatives to total income fell by 12.2 percentage points year-on-year (YoY), reflecting market adjustments to the new client-level activity framework (CAS). Groww expects this contribution to recover once the recommendations in SEBI’s consultation paper take effect.

Consolidated expenses rose 29% YoY, while profit after tax (PAT) increased 54%, taking the PAT margin to 47%, up 3 percentage points YoY. Groww continued to expand its newer businesses, with wealth assets crossing Rs 10,000 crore and assets under management at its asset management company rising 145% YoY to Rs 7,179 crore.

CAS impact on Groww

“While our Equity Derivatives revenue declined 14.3% QoQ, the bulk of which we attribute to CAS, this was in-line with the decline that the industry has seen,” the company said in its investor presentation.

“The consultation paper published by Sebi proposes to delink derivatives settlement from CAS closing prices, which, if implemented, should help in normalising trading activity,” it added.

The company said expenses came in higher amid an uptick in tech costs largely due to higher trading days, one-time reimbursements to clients for abnormal trades, and inflation in computer costs due to AI and other factors.

Typically, quarters with higher trading days tend to have a higher cost to serve. Groww expects the inflation-driven costs to remain a part of the operational baseline run rate going forward.

Groww AMC’s AUM rose 145% YoY to Rs 7,179 crore from Rs 2,928 crore. The share of actively managed AUM increased to 57% from 47%. AMC revenue grew 131% YoY during the quarter, while it reported a net loss of Rs 8.3 crore.