What’s in it with Groww’s Profit Growth and Revenue Decline?
On one side Groww posted a 12% YoY growth in net profit (PAT). It’s profit is now Rs. 471 crore.
But on the other side it has posted a YoY revenue decline of 9.5%. It’s revenue is now (Q2 FY26) Rs 1019
Groww’s profit went up even with lower revenue because its business doesn’t require a big increase in costs to support more users (revenue).
In Q2 FY26, its profit rose 12% to Rs 471.3 crore, even though operating profit fell to Rs 624 crore.
This happened because, I think, more than 90% of its costs are indirect (a large part of whatever it earns turns into profit), which keeps its bottom line strong.
When most of a company’s costs are indirect (like Groww’s), it means those costs don’t change much even if revenue goes up or down. So once these fixed costs are covered, almost any extra money the company earns becomes profit. This is why Groww’s profit can rise even when revenue falls. Its expenses don’t increase at the same pace, allowing more of its earnings to stay in the bottom line.
The revenue drop mainly came from derivatives trading. Groww’s revenue fell 9.5% to Rs 1,019 crore, and this happened because new rules reduced trading volumes and lowered revenue per order in derivatives.
This mattered a lot because derivatives make up 57% of Groww’s total income. So, even a moderate decline in this area pulls overall revenue down.
Derivative declined, but the company saw growth in other areas. Active users rose 27% YoY to 14.8 million, and cash segment revenue improved due to higher order values and price increases.
These helped support profitability despite weaker trading activity.
Disclaimer: This content is for informational purposes only and should not be considered investment advice.
