GROWW The Quarter Where Profit Grew and the Business Didn't

The Cross-Sell Machine Absorbs a Regulatory Hit

Groww's pitch, repeated by co-founder and CEO Lalit Keshre in his first shareholder letter as a public-company founder, is a compounding loop: build one product well, earn trust, cross-sell the next one, repeat. "As customers grow in their lives, we forge deeper relationships with them. They might start with one product, but then they need many more products." The company has shipped 10+ products off a single mutual-fund-and-stocks anchor - margin trading (MTF^»), loans against securities (LAS^»), commodities (launched September 2025), a desktop trading terminal ("915," still in beta), bond IPOs, and now a wealth-management arm bolted on via acquisition - and the flywheel is visibly turning in places: the MTF book grew from Rs. 389 crore a year ago to Rs. 1,668.3 crore this quarter, a 4.3x increase, funded almost entirely by existing Stocks customers adopting a second product.

This is Groww's first quarterly filing as a listed company - Billionbrains Garage Ventures Limited completed its IPO on November 12, 2025 (663,230,051 equity shares at Rs. 100 each, split between a 106,000,000-share fresh issue and a 557,230,051-share offer for sale^» by existing holders) and listed on the NSE and BSE that day. The quarter this filing actually covers, though, ended September 30, 2025 - six weeks before the IPO - so everything in the financial statements themselves reflects Groww as it was just ahead of going public, not as a newly public company.

And what that quarter shows is a business absorbing a real regulatory hit: Revenue from Operations fell 9.5% year-over-year, to Rs. 1,018.74 crore, and Adjusted EBITDA^» - the number management itself treats as the true read on operating health - fell 13.0%. Both declines trace to the same cause, stated plainly in the company's own investor Q&A: the "True-to-label" circular and Equity Derivatives regulations that took effect over the past year, which compressed the economics of Groww's largest single revenue line (equity derivatives, still 57% of total income this quarter, down from 68% two years ago). Yet the headline that led Groww's own results announcement was Profit After Tax up 12% year-over-year - a number that, on inspection, isn't describing the same underlying trend at all (see Beyond the Usual below).

Underneath the regulatory drag, the parts of the business not yet touched by a regulator are compounding exactly the way the founders describe: Mutual Fund SIP^» inflows grew 34% YoY to Rs. 11,253.70 crore, the "affluent" user segment (Groww's term for higher-net-worth customers) grew 52% YoY versus 20% for the overall active-user base and now holds 34% of Total Customer Assets, and in October 2025 Groww completed its acquisition of Fisdom (legal entity: Finwizard Technology Private Limited), a wealth-distribution platform spanning mutual fund advisory, PMS/AIF distribution, insurance distribution, and unlisted securities - the clearest signal yet of where the company thinks its next monetization leg sits.

The Prescription

Groww should double down on integrating Fisdom's wealth-distribution rails - mutual fund advisory, PMS/AIF, insurance, unlisted securities - into the core app as fast as the "tech-led" integration co-founder Lalit Keshre described on the earnings call allows, and treat it as the primary growth engine for the next several years rather than a bolt-on. The reason is structural, not just a nice-to-have: Derivatives, Groww's largest revenue line, is the one part of the business a regulator has already shown it will act on twice in twelve months, while wealth distribution - AUM-based and advisory fees - isn't yet subject to the same kind of ceiling, and the company's own data shows its highest-quality, highest-growth customer cohort (the affluent segment) is exactly the one Fisdom's products are built for.

What it should stop doing: leading its own investor materials with "Total Customer Assets: Rs. 2.7 trillion, +33% YoY" and "Total Transacting Users: 19 million, +27% YoY" in giant type on the very first data slide, while the metric that actually funds the business - Revenue from Operations - fell 9.5% the same quarter, in smaller type three pages later. Both headline numbers are structurally one-directional (Total Transacting Users is a cumulative, all-time count that can never shrink; Total Customer Assets rides market levels as much as new deposits), and burying the metric that's actually shrinking behind ones that can't is a framing choice, not a neutral one - see the first finding in Beyond the Usual.

Key Financial Metrics

Q2 FY26 (quarter ended September 30, 2025) vs. Q2 FY25 (quarter ended September 30, 2024) - consolidated, Ind AS, reported in INR millions and USD

Groww's fiscal year runs April-March, so "Q2 FY26" is the July-September 2025 quarter. USD figures use the INR/USD rate on each respective quarter's own period-end date (Rs. 88.84/$1 for Sep 2025, Rs. 83.83/$1 for Sep 2024), not a single blended rate.

Metric	Q2 FY26	Q2 FY25	YoY
Revenue from Operations	Rs. 1,018.74 crore ($114.7M)	Rs. 1,125.39 crore ($134.3M)	⚠️ -9.5%
Total Income	Rs. 1,070.80 crore ($120.5M)	Rs. 1,160.05 crore ($138.4M)	⚠️ -7.7%
Adjusted EBITDA	Rs. 624.10 crore ($70.3M)	Rs. 717.70 crore ($85.6M)	⚠️ -13.0%
Operating Income¹	Rs. 586.14 crore ($66.0M)	Rs. 535.59 crore ($63.9M)	⚠️ +9.4%*
Profit After Tax (Net Income)	Rs. 471.34 crore ($53.1M)	Rs. 420.16 crore ($50.1M)	⚠️ +12.2%*

¹ Not a reported statutory line item; calculated as Revenue from Operations minus Total Expenses, since Groww's Ind AS statement doesn't separately caption "Operating Income." * Flagged despite the positive sign - see Beyond the Usual for why both increases are a base-effect artifact, not organic improvement.

Free cash flow isn't disclosed at the quarterly level, only cumulatively for the six months. H1 FY26 net cash used in operating activities was Rs. (152.74) crore, versus Rs. (989.42) crore in H1 FY25 - after subtracting capex, FCF was roughly $(17.8)M this half versus $(119.2)M a year ago. That's a genuine, non-illusory improvement (narrower cash burn, not a base-effect one), driven mainly by a smaller build in loans and other financial assets than last year's half. Both halves remain cash-flow negative despite reported profitability - not unusual for a business whose NBFC^» lending arm is still growing its own balance sheet, but worth knowing rather than assuming "profitable" means "cash-generative" here.

On cash: the balance-sheet line "Cash and cash equivalents" was Rs. 201.70 crore ($22.7M) at quarter-end, down from Rs. 361.11 crore at March 2025. Groww's own broader definition of "cash balance" (fixed deposits, mutual fund investments, government securities and NCDs) - the more meaningful treasury figure for a company that actively invests its own float - was Rs. 3,599 crore (~$405M) at quarter-end, down from Rs. 3,819.70 crore at the start of the quarter, mostly explained by the Rs. 961 crore (~$108M) paid toward the Fisdom acquisition (see below).

Balance sheet metric	Sep 2025	Mar 2025	Change
Total Assets	Rs. 13,676.89 crore	Rs. 10,077.31 crore	✅ +35.7%
Total Liabilities	Rs. 6,321.07 crore	Rs. 5,221.87 crore	⚠️ +21.0%
Total Equity	Rs. 7,355.82 crore	Rs. 4,855.45 crore	✅ +51.5%

The equity jump is mostly the pre-IPO capital raise: Rs. 1,718.65 crore came in from a fresh CCPS^» placement and stock-option exercises during the quarter (see Beyond the Usual), not from retained profit alone. Goodwill jumped from Rs. 318.69 crore to Rs. 1,340.15 crore - almost entirely the provisional purchase-price allocation for the Fisdom acquisition, discussed below.

Groww reports and manages its business as a single reportable segment under Ind AS - the filing states that costs and expenses are reviewed by the CODM (Chief Operating Decision Maker) "when making decisions about allocating resources and assessing performance of the Group as a whole," rather than by product line, so there's no segment-level P&L to compare, despite the rich product-level revenue mix Groww discloses in its investor presentation (see Beyond the Usual).

Key Operational Metrics

Q2 FY26 vs. Q2 FY25 unless noted

Metric	Q2 FY26	Q2 FY25	YoY
Total Transacting Users (cumulative)	19.0M	~15.0M (implied)	✅ +27%
Active Users	14.8M	not disclosed this period	-
NSE Active Clients	11.9M	12.3M	⚠️ -3.3%
Total Customer Assets	Rs. 2,70,000 crore ($30.4B)	~Rs. 2,03,000 crore (implied)	✅ +33%
MF SIP Inflows	Rs. 11,253.70 crore	Rs. 8,383.20 crore	✅ +34.2%
Retail Cash ADTO»	Rs. 10,129.40 crore	Rs. 10,124.60 crore	flat
Retail Derivatives Premium ADTO	Rs. 9,573.50 crore	Rs. 7,915.80 crore	✅ +20.9%
Revenue per Broking Order	Rs. 19.8	Rs. 18.0	✅ +10%

Market share moved up across every product Groww discloses it: NSE active-client share from 25.6% to 26.3%, MF SIP inflow share from 11.7% to 13.1%, Retail Cash ADTO share from 17.7% to 25.8%, and Retail Derivatives Premium ADTO share from 10.7% to 17.3%. That's a genuinely strong competitive-position story sitting inside an industry that's shrinking in absolute terms - industry-wide NSE active clients fell from 50.2 million in January 2025 to 45.3 million by this quarter's end, a pattern management attributes to the same F&O^» regulatory tightening hitting Groww's own revenue (see The Cross-Sell Machine above). Gaining share of a shrinking pool is real, but it isn't the same as growing the pool.

MTF (launched April 2024) reached 78,000 active users and a Rs. 1,668.3 crore funded book, up from 55,000 users and Rs. 1,035.80 crore just one quarter earlier - a 1.7% market share by Groww's own estimate, which management framed on the call as "still in the nascent stages," targeting a "double-digit" market share over the next three years. Loans against securities (LAS) is earlier still - as of this quarter it's "not even fully LAS," in CFO Ishan Bansal's words on the call, only loans against mutual funds, with securities-backed lending yet to launch. Groww CreditServ Technology (the group's NBFC) disbursed Rs. 144.40 crore in Q2, up 58% quarter-over-quarter, of which 36% was LAS; the personal-loan book stood at Rs. 1,140 crore and the LAS book at Rs. 60 crore.

Beyond the Usual

This filing is a Regulation 33 unaudited results statement, not a full annual report - it carries nine brief explanatory notes rather than the extensive commitments/related-party/lease footnotes a 10-K-style filing would have. The findings below come from those notes, the investor presentation's own Q&A, and the earnings call - not a deeper notes-to-accounts section that doesn't exist in this particular document.

Headline growth metrics that can only go up, next to a revenue line that went down

The first substantive slide of Groww's shareholder letter leads with two numbers in large type: "19 Mn Total Transacting Users, +27% YoY" and "Rs. 2.7 Tn Total Customer Assets, +33% YoY." Both are structurally one-directional metrics - Total Transacting Users is defined as a cumulative, all-time count of anyone who ever deposited Rs. 1,000 or transacted once, so it can never decline even if every one of those users stopped using the platform tomorrow; Total Customer Assets rides market levels as much as it does net new deposits. Three pages later, the metric that actually determines whether the business makes money - Revenue from Operations - is disclosed to have fallen 9.5% year-over-year the same quarter. Leading with metrics that structurally can't go down, while the metric that actually funds the company went down, is exactly the gross-versus-net framing pattern worth calling out on its own, independent of whether the underlying business is otherwise healthy (it mostly is - see Key Operational Metrics above for a more honest read).

A reported 12% profit "increase" that's a 12-13% decline once a one-off is removed

Groww's own investor Q&A supplies the explanation, buried on page 8 of a 12-page document rather than in the headline results: Q2 FY25 (the year-ago comparison quarter) included a Rs. 159.30 crore one-time long-term-incentive provision that was reversed the following two quarters. Strip that reversal out and adjust for tax, and Q2 FY25's comparable profit would have been higher - meaning Q2 FY26's reported +12% Profit After Tax growth is actually a 12-13% decline on a like-for-like basis, tracking the same regulatory-driven revenue decline discussed above, not diverging from it. Adjusted EBITDA (down 13.0%, a measure that already excludes one-off items) is the more honest number here, and it's the one management itself said investors should be relying on - yet Profit After Tax, not Adjusted EBITDA, is what led the results announcement. The explanation is genuinely disclosed, just three sections and eight pages away from the number it's explaining.

An engaged-user metric quietly declining behind the metric that led the cover page

NSE Active Clients - customers who transacted at least once in the trailing twelve months, a metric the company itself describes in its investor letter as "a lag metric," where "any decline is observed with a delay" - declined year-over-year even as Groww's market share of that shrinking pool rose (see Key Operational Metrics above for both figures). This sits in real tension with the cover-page "Total Transacting Users: 19 Mn, +27% YoY" figure (see the first finding above): one measures everyone who's ever shown up, the other measures who's still around. The company's own investor-letter answer to the question "do you think NSE Active Clients have peaked?" pointed to October growth and market-share gains rather than addressing the industry-wide contraction directly - a reasonable answer, but one that leans on the more flattering framing rather than the declining one.

A ~$108 million acquisition on the balance sheet a full quarter before it touches profit or loss

Groww's acquisition of Finwizard Technology Private Limited (the "Fisdom" wealth-distribution platform) obtained final regulatory approval by September 9, 2025, and 99.72% of the Rs. 958.42 crore consideration (plus a further Rs. 2.63 crore paid October 3) was paid within this quarter. Fisdom is accordingly consolidated on Groww's September 30, 2025 balance sheet - it's why goodwill jumped from Rs. 318.69 crore to Rs. 1,340.15 crore in a single quarter - but Groww's own investor materials state explicitly that Fisdom's profit-and-loss impact "will start getting consolidated" only from the following quarter, since the acquisition wasn't deemed fully "consummated" until October 3. The result is one quarter where a roughly $108 million acquisition inflates total assets and goodwill with no offsetting revenue showing up yet - a timing quirk worth knowing before comparing this quarter's asset base to the next one's.

A near-tripling of CCPS-linked equity, and a fresh preference-share placement, both weeks before the IPO

A pre-IPO cap-table cleanup shows up plainly in this quarter's notes: Series A-1 through F Compulsorily Convertible Preference Shares (CCPS) - 87,965,050 shares in total, at Rs. 10 each - converted into 3,864,548,946 ordinary equity shares (par value Rs. 2) during the quarter, alongside a fresh CCPS Series F placement of 17,968,043 shares to existing investor Viggo Investment Pte Ltd on July 10, 2025, under a share subscription agreement dated April 28, 2025. Both are standard pre-IPO mechanics for an Indian startup raising money across many rounds at different valuations - unremarkable on their own - but they explain most of the quarter's swing in paid-up equity capital and are worth knowing about before comparing this quarter's share count to any later one.

Separately, 33,855,753 equity shares were issued from employee stock-option exercises under the "BGV ESOS 2024" scheme during the quarter - a second, smaller source of the same dilution, timed the same way.

What Management Actually Emphasized on the Call

This was Groww's first-ever quarterly earnings call, held the same day as the results filing. Two things stand out about what management chose to lean into and what it moved past quickly.

Management leaned hard into a long product-runway narrative and a reframe of a declining metric as a quality signal. CEO Lalit Keshre's opening remarks said the company still feels like it's "just... starting in our journey" nine-plus years in, and when asked directly about the next two to three years, he named wealth management as the priority: "wealth management is going to be a big game for us going forward," alongside continued build-out of MTF, LAS, and commodities. On F&O user counts holding roughly flat for two to three quarters, CFO Ishan Bansal reframed it as a positive: "the low-quality customers who were earlier placing significantly lesser number of orders... is actually moving away from the platform, which we think is a good thing" - a genuine argument (average order value per user is up materially), but one that recasts a user-count plateau as evidence of a healthier mix rather than addressing it as a growth question directly.

Two things got noticeably terse treatment relative to how much they matter. Asked directly what "major operational or regulatory risk" the company foresees over the next two quarters, Group Head of Finance Lalit Bhimani answered: "From a regulatory standpoint, I think it is BAU (business as usual) for us. There is no specific risk which we are foreseeing" - a one-line dismissal on the very call where the reason for this quarter's 9.5% revenue decline was the "True-to-label" circular and Equity Derivatives regulation cited in the printed investor Q&A (see Beyond the Usual above), neither of which came up unprompted on the live call itself. And on customer acquisition cost - raised in the very first question of the call and revisited later by a second analyst - COO Harsh Jain gave no forward number at all beyond "it is difficult to predict for the future... not going to be very different from the previous times," despite H1 FY26's CAC of Rs. 1,374 running 73% above H1 FY25's Rs. 796, a jump management itself attributed largely to discretionary IPO-adjacent branding (sponsorships including the Asia Cup and Kaun Banega Crorepati) rather than performance-marketing scale-up.

Target Valuation Range

No independent fair-value range can be stated yet - only the market's own implied price, roughly Rs. 96,250 crore of enterprise value at ~23.9x FY2025 EV/Revenue and ~52.8x P/E, can be reported. With about a week and a half of trading history and no listed Indian peer at a comparable scale, there isn't yet enough of a DCF track record or peer-multiple anchor to independently judge whether that price is too rich - but every conventional multiple looks stretched even before factoring in this quarter's 13% Adjusted EBITDA decline.

A genuine two-year price history isn't possible for this post: Groww's IPO and listing (November 12, 2025) came after this quarter's September 30, 2025 end date, so there was no public market price at all as of the period this filing covers. The only price history that existed by the time this quarterly filing was released (November 21, 2025) is the stock's first six trading days: it opened at Rs. 131.33 on debut, climbed as high as Rs. 188.77 by November 18 (a 43.7% run from the listing-day close in four trading sessions), then pulled back to Rs. 157.84 by November 21 - a swing large enough on its own to be the story, the way a newly-listed stock's first weeks usually are, rather than a settled trading range worth reading much into yet.

Using the Rs. 157.84 close on November 21, 2025 (the day of this filing) and Groww's post-IPO share count of approximately 6,098,260,000 shares (5,992,260,000 pre-IPO shares outstanding at September 30, 2025, plus the 106,000,000-share fresh issue - the 557,230,051-share offer for sale sold existing shares and didn't change the total count).

Market cap → enterprise value	Q2 FY2026 (as of filing, Nov 21 2025)
Share price	Rs. 157.84
Shares outstanding	6,098,260,000
Market capitalization	Rs. 96,250 crore (~$10.85B)
Less: net of treasury (Rs. 3,599 crore) and debt securities/borrowings (Rs. 334.77 crore)	—
Enterprise value	~$10.48B

Peer-multiple sanity check	Q2 FY2026 (FY2025 basis)
FY2025 Revenue from Operations	Rs. 3,901.72 crore (~$439M)
Enterprise value	~$10.48B
EV/Revenue	~23.9x
FY2025 Profit After Tax	Rs. 1,824.37 crore (~$205M)
P/E (at Nov 21 close)	~52.8x
P/E (at Rs. 100 IPO issue price)	~33.5x

EV/Revenue is rich for a business whose most recent quarter's Revenue from Operations and Adjusted EBITDA both declined year-over-year. The gap between the two P/E multiples in just over a week of trading is itself a data point about how quickly the market re-rated the stock past its own offer price. Both multiples assume the cross-sell flywheel and the Fisdom wealth-management integration play out roughly as management describes, at a moment when the company's own preferred profitability measure just declined and its largest revenue line remains subject to a regulator that has already intervened twice in the past year.

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