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

The Regulatory Drag Lifts, and a New Bet on Wealth Arrives

Read the headline numbers alone and Groww's second quarter as a public company looks like a reversal: Profit After Tax fell 28% year-over-year, to Rs. 546.93 crore, in a quarter where Total Income actually grew 26%. That combination - revenue up sharply, profit down sharply - is exactly the kind of thing that should make a reader stop and check the footnotes. It should, because the explanation is almost identical to last quarter's finding about a reported 12% profit increase that was actually a decline once a one-off was stripped out - except this quarter it runs the other way. The year-ago comparison quarter (Q3 FY25, ended December 31, 2024) is the one that carried a one-time reversal of a cancelled long-term-incentive provision, worth Rs. 424.68 crore pre-tax (Rs. 314.80 crore post-tax, per the company's own numbers). Strip that reversal out of the base quarter and Groww's Profit After Tax actually grew roughly 24% year-over-year this quarter - a genuinely different story from "profit fell 28%," and the mirror image of last quarter's "profit rose 12%" headline that was itself misleading in the other direction (see Beyond the Usual below).

Underneath both distorted headlines sits a business that, on Adjusted EBITDA^» - the number Groww's own CFO Ishan Bansal has now said twice across two quarters is the one investors should actually watch - grew a clean 24.0% year-over-year, to Rs. 741.80 crore, with margin (on a like-for-like basis excluding Fisdom) expanding to 63.7% from 61.4% a year earlier. Total Transacting Users reached 20.4 million (+25% YoY), Total Customer Assets hit Rs. 3.0 trillion (+39% YoY), and - notably, given last quarter's regulatory-hit narrative - Equity Derivatives, still Groww's largest single revenue line, grew 7% year-over-year in revenue terms rather than shrinking, alongside 24% growth in Stocks revenue. The regulatory drag that cut Revenue from Operations 9.5% last quarter appears to be easing, at least for now.

The same day as the results, Groww's board also approved bringing State Street Global Advisors in as a strategic investor in Groww Asset Management Limited (Groww AMC) - the second time in three months Groww has reached for an outside capital/credibility partner around a newer business line, after Fisdom for wealth distribution in October (see Beyond the Usual for the deal's structure and what it reveals about Groww AMC's own scale).

The Prescription

Groww should treat the newly signed State Street partnership and the now fully consolidated Fisdom acquisition as two halves of the same strategic bet - global-caliber asset-management credibility feeding the same affluent-customer funnel that Fisdom's wealth-distribution products are built to monetize - and move fast to give both a genuinely differentiated product roadmap rather than a slow, sequential integration. Harsh Jain himself described the Fisdom integration as "still a little early" and its eventual differentiation as something the company is "working on different parameters on," while separately calling the standalone asset-management business "very early stage... we've seen very good growth in terms of new customers coming in" but still small; with a marquee global partner now attached to that AMC business specifically, the pressure to actually ship something distinctive on both fronts is now higher, not lower.

What it should stop doing: giving analysts numbers on the call that don't reconcile with the company's own printed disclosures. Co-founder and COO Harsh Jain told the call Groww had "1,450 approximate employees" last quarter and "1,350" this quarter - a stated reduction of 100 - while the transcript's own published footnote corrects the record to 1,370 and 1,350, a reduction of just 20 (see Beyond the Usual for why this matters more than the headcount number itself does).

Key Financial Metrics

Q3 FY26 (quarter ended December 31, 2025) vs. Q3 FY25 (quarter ended December 31, 2024) - consolidated, Ind AS, reported in INR millions and USD

Groww's fiscal year runs April-March, so "Q3 FY26" is the October-December 2025 quarter. USD figures use the INR/USD rate on each respective quarter's own period-end date (Rs. 89.77/$1 for Dec 2025, Rs. 85.79/$1 for Dec 2024), not a single blended rate.

Metric	Q3 FY26	Q3 FY25	YoY
Revenue from Operations	Rs. 1,216.07 crore ($135.5M)	Rs. 974.54 crore ($113.6M)	✅ +24.8%
Total Income	Rs. 1,261.07 crore ($140.5M)	Rs. 1,004.45 crore ($117.1M)	✅ +25.5%
Adjusted EBITDA	Rs. 741.80 crore ($82.6M)	Rs. 598.10 crore ($69.7M)	✅ +24.0%
Operating Income¹	Rs. 700.52 crore ($78.0M)	Rs. 992.26 crore ($115.7M)	⚠️ -29.4%*
Profit After Tax (Net Income)	Rs. 546.93 crore ($60.9M)	Rs. 757.11 crore ($88.3M)	⚠️ -27.8%*

¹ Not a reported statutory line item; calculated as Revenue from Operations minus Total Expenses, consistent with the prior quarter's post, since Groww's Ind AS statement doesn't separately caption "Operating Income." * Flagged despite the negative sign - both declines are the same base-effect artifact (last year's one-time provision reversal inflating the comparison quarter), not real deterioration. See Beyond the Usual for the like-for-like read.

Basic EPS fell further than Profit After Tax itself - Rs. 0.89 this quarter versus Rs. 1.38 a year ago, a 35.5% decline - because the -27.8% profit swing is compounding with a roughly 12% larger weighted-average share count following November's IPO, CCPS^» conversions, and ESOP exercises. Both effects are real; neither is a business-quality signal on its own, but a reader comparing this quarter's EPS to last year's should know two different things are moving it in the same direction.

Free cash flow and a full balance sheet aren't disclosed this quarter - not an omission specific to Groww, but a structural feature of how India's SEBI listing rules work: a quarterly (non-half-year) Regulation 33 filing only requires the profit-and-loss statement, while a full statement of assets and liabilities and a cash-flow statement are only mandated alongside half-yearly (the quarter ended September 30) and annual results. The next such disclosure will come with FY26's annual results. Cash and balance-sheet figures as of September 30, 2025 - the last verified point - are covered in the prior post; they aren't repeated here since a quarter's worth of activity (including a subsequent State Street capital inflow that hadn't yet closed) makes them stale rather than current.

Groww continues to report and manage its business as a single reportable segment under Ind AS 108, reviewed by the CODM (Chief Operating Decision Maker) as a whole rather than by product line - the same disclosure convention as last quarter, so there's still no segment-level P&L to compare despite the rich product-mix data Groww discloses separately in its investor letter.

Key Operational Metrics

Q3 FY26 vs. Q3 FY25 unless noted

Metric	Q3 FY26	Q3 FY25	YoY
Total Transacting Users (cumulative)	20.4M	~16.3M (implied)	✅ +25%
Active Users	16.0M	not disclosed this period	-
NSE Active Clients	not disclosed this quarter	11.9M (per prior post)	-
Total Customer Assets	Rs. 3,00,000 crore ($33.4B)	~Rs. 2,16,000 crore (implied)	✅ +39%
MF SIP» Inflows	Rs. 12,327.90 crore	Rs. 9,476.60 crore	✅ +30.1%
Retail Cash ADTO» (Stocks)	Rs. 11,331.00 crore	Rs. 9,394.20 crore	✅ +20.6%
Retail Derivatives Premium ADTO	Rs. 11,483.80 crore	Rs. 7,918.80 crore	✅ +45.0%
MTF» Book	Rs. 2,307.40 crore	Rs. 542.40 crore	✅ +325.4%

Groww didn't disclose NSE Active Clients - the "lag metric" it flagged as declining in last quarter's post - separately this quarter, so there's no fresh read on whether that particular decline continued or reversed; stating that plainly rather than guessing.

Market share moved up again across every product Groww discloses it: MF SIP inflow share from 12.3% to 13.7%, Retail Cash ADTO (Stocks) share from 21.6% to 28.8%, Retail Derivatives Premium ADTO share from 12.2% to 18.1%, and MTF book share from 0.7% to 2.0% - a genuinely larger jump than any single-quarter share move in the prior post, though MTF's base is still small enough (2% share) that a percentage-point jump reads bigger than the absolute business it represents.

Commodity Derivatives - launched in a phased rollout in Q2 FY26 (per last quarter's disclosure) - had its first full quarter in Q3 and reached 4.6% of broking orders and 3.5% of Total Income, up from under 0.5% of income in Q2, with 255,000 active users implying a 1.6% attach rate across Groww's overall active-user base. MTF reached a Rs. 2,307.40 crore funded book (roughly Rs. 600 crore added per quarter, per CFO Ishan Bansal on the call, a pace management said it expects to continue absent a broader market rally that would accelerate it further). Groww CreditServ, the group's NBFC^», grew its loan book 7% quarter-over-quarter to roughly Rs. 1,390 crore - personal loans grew a modest 2% quarter-over-quarter, while Loans Against Securities more than doubled in the quarter and now makes up 9.7% of the balance-sheet loan book, up from 4.6% the quarter before.

Customer diversification continued to deepen: 49.5% of customers now use two or more products, up from 47.6% a year ago, and 4.2% use four or more, up from 2.9% - roughly 8 million customers today use more than one product on the platform. Stocks and Equity Derivatives together, still Groww's two scaled products, grew a combined 24% and 7% respectively in revenue terms this quarter, yet their combined share of Total Income fell from 81% a year ago to 72% now, as newer products (Margin Trading Facility, +4 percentage points of income share year-over-year; Commodity Derivatives, +4pp; Fisdom, +2pp) pick up a growing slice of the mix - the diversification story management has been describing is showing up in the actual revenue split, not just in customer-adoption counts.

Beyond the Usual

This filing is again a Regulation 33 unaudited results statement rather than a full annual report, so the findings below come from its brief explanatory notes, the investor presentation's own Q&A, and the earnings call - the same source mix as last quarter's post.

A 28% profit "decline" that's actually a 24% increase once the same one-off is removed

This is the mirror image of a finding from last quarter's post: Q2 FY26's reported +12% Profit After Tax growth turned out to be a 12-13% decline once a reversed one-time long-term-incentive provision was stripped from the year-ago base. This quarter runs the same mechanism in the opposite direction. The comparison quarter this time - Q3 FY25, ended December 31, 2024 - is the one that carried the reversal: Rs. 424.68 crore of a cancelled long-term-incentive provision reversed in that single quarter (per Note 6 of this filing), inflating Q3 FY25's reported PAT to Rs. 757.11 crore. Strip that reversal out and Q3 FY25's comparable PAT was Rs. 442.30 crore - meaning Q3 FY26's reported -27.8% Profit After Tax "decline," on a like-for-like basis, is actually a roughly +24% increase (Rs. 546.90 crore versus Rs. 442.30 crore). Adjusted EBITDA - up a clean 24.0% year-over-year, unaffected by the one-off since it already excludes long-term-incentive items by definition - is the more honest read here, exactly as it was last quarter, and it's telling the same story both times: real, un-distorted profitability is growing at a healthy clip, and the headline PAT number has now misled in both directions across Groww's first two quarters as a public company purely because of where a single one-time reversal happened to land on the calendar.

A live on-call employee-count answer that needed a published footnote to correct

Asked about headcount on the call, Co-Founder and COO Harsh Jain said: "previous quarter, we had 1,450 approximate employees. This quarter, we had 1,350. So we've reduced it by 100." The transcript Groww itself published carries a footnote correcting this: "The number of full-time employees (excl. Fisdom) on Groww were ~1,370 at the end of Q2 FY26 and ~1,350 at the end of Q3 FY26, implying a decrease of 20 employees QoQ" - a fifth of the reduction Jain stated live. Neither figure is dramatic on its own (a 20-person or even a 100-person change at a company this size isn't a governance problem), but a management team stating a number on a public earnings call that its own subsequently published transcript has to correct is worth flagging as a process point, particularly this early in Groww's life as a listed company with an actual analyst base cross-checking verbal answers against filed disclosures.

Fisdom's first quarter in the P&L came in below its pre-acquisition run rate, with no clear explanation offered

Fisdom (Finwizard Technology Private Limited) is now fully consolidated in Groww's income statement for the first time - the acquisition's profit-and-loss impact was flagged last quarter as starting only from October 3, 2025, and this is that quarter. An analyst (Supratim Datta, Jefferies) did the math on the call and found Fisdom's implied revenue at roughly Rs. 29 crore this quarter, versus a reported pre-acquisition run rate "somewhere around INR 40 crores per quarter" - a meaningful gap. Co-Founder and COO Harsh Jain's answer didn't engage with the gap at all, pivoting instead to integration strategy: "there's a lot of work going on the wealth side from a strategy point of view... very early stage for us to talk about what will be the differentiator... From a P&L point of view, I think this consolidation will continue... we will start specifying the details and the transitions in the near quarters." A separate, later question from a different analyst (Dipanjan Ghosh, Citi) about whether Fisdom's broking revenue is classified under Groww's own broking-revenue line got a direct answer from CFO Ishan Bansal - "we haven't clubbed yet... once the integration is done, we'll be able to probably do that" - but that answers a narrower classification question, not why the total Fisdom number came in below its own pre-acquisition run rate. The Rs. 29 crore-versus-Rs. 40 crore gap itself went unaddressed on the call.

A global asset manager buys into Groww's AMC at a 4.99% voting cap, on the same day results were filed

State Street Global Advisors will invest up to Rs. 580.03 crore (~$65 million) for up to a 23% fully diluted stake in Groww Asset Management Limited (Groww AMC) - but the agreement caps State Street's voting power at 4.99% regardless of economic stake, an unusual split for a strategic-investor deal this size. The regulatory disclosure also reveals Groww AMC's own previously-undisclosed scale: Rs. 4,118.80 crore in AUM^» and 1.2 million unique investors as of December 2025, against FY2025 income of just Rs. 17.09 crore - a genuinely fast-scaling business that was, until this deal, invisible in Groww's own disclosures relative to its actual AUM base.

A quantified, if preliminary, cost from India's new labour codes

The Indian government notified four consolidated labour codes - covering wages, industrial relations, social security, and occupational safety - on November 21, 2025, replacing 29 existing labour laws. Groww's filed notes disclose an incremental impact of Rs. 5.31 crore (consolidated; Rs. 2.19 crore at the standalone level) already recorded this quarter based on the company's own preliminary assessment, with an explicit caveat that "the Company continues to monitor for clarifications... and would provide appropriate accounting effect on the basis of such developments as needed." Separately, on the call, CFO Ishan Bansal cited a narrower figure - "roughly INR2.5 crores to INR3 crores of provisioning... from a gratuity perspective" - which doesn't obviously reconcile with the larger filed figure; the two may cover different scopes (gratuity alone versus the four codes' combined impact) rather than being the same number restated, but the filing doesn't clarify which. Either way, it's a real, quantified compliance cost landing in a filed document months before most Indian companies will have had to book anything similar - worth knowing as an early data point on how the new codes are actually hitting P&Ls, even with the scope of the two disclosed figures not fully reconciled.

A rising share of "serious" users, by Groww's own internal yardstick

The ratio of broking transacting users to total Active Users - an internal proxy for user engagement quality that Groww doesn't publish as a headline KPI but volunteered on the call - rose from roughly 60% a year ago to 67-68% this quarter. Management attributed the move partly to reactivation from gold and silver commodity trading and partly to a wave of IPO-driven activity during the quarter, rather than to steady organic improvement in engagement - a useful qualifier for a reader tempted to read the ratio as a clean trend line.

What Management Actually Emphasized on the Call

The State Street/Groww AMC deal drew the most sustained analyst interest of the session, with management leaning into a long-runway framing consistent with last quarter's tone - the standalone AMC business is "very early stage" but growing, with the new partner meant to accelerate rather than validate the strategy. On dividends - asked directly given no distributions to date - CFO Ishan Bansal was equally direct: "we are still in a very high growth phase. We are still building new businesses where we have raised money in the IPO also to invest in those businesses... we are not expecting to give dividend in the near future."

On margin philosophy, Bansal reiterated a position from the prior quarter that Adjusted EBITDA isn't a target to manage toward: "we don't look at EBITDA as like a metric that we want to drive. This is more of an output... the acquisition will always be happening, but it will depend more on the market, less on our EBITDA." Asked directly about competitive intensity given rising HFT (high-frequency trading) activity in F&O^», Co-Founder and CTO Neeraj Singh dismissed the framing entirely: "we are not into HFT and all... since none of our customers are into HFT or MFT space, I think that is not required" - a clean, specific answer, unlike the terser regulatory-risk answer flagged in the prior quarter's post.

One exchange is worth reading alongside this quarter's own retail-losses context: asked whether Groww had seen any change in retail losses on derivatives given SEBI's public scrutiny of the topic, Bansal gave a genuinely nuanced answer rather than a dodge - acknowledging that pure derivative-only customers "are probably very similar ratios as what SEBI is also publishing in terms of losses" (i.e., SEBI's well-documented finding that most retail F&O traders lose money), but noting that such derivative-only customers are now under 0.3% of Groww's total active-user base and shrinking, since most customers diversify into multiple products over time. It's an answer that engages with the actual regulatory concern rather than reframing around a more flattering number - a contrast worth noting given the CAC and headcount questions elsewhere on the same call that got less precise treatment (see Beyond the Usual above).

Stock Price: A Post-IPO Round Trip

GROWW.NS, November 12 - December 31, 2025

Groww's shares opened at Rs. 131.33 on their November 12, 2025 debut, climbed as high as Rs. 188.77 by November 18 (a 43.7% run in four trading sessions, as covered in the prior post), then spent the rest of the quarter giving most of that back: a slide to a Rs. 142.92 low on December 17 - a 24.3% drop from the November peak - before a partial recovery to close the quarter at Rs. 156.17 on December 31, still 18.9% above the IPO issue price of Rs. 131.33 but well off the post-listing high. This is still a stock with under two months of trading history as of this quarter's close, so a single round trip of this size says more about newly listed shares finding a trading range than it does about any change in the underlying business - the earlier post's caution about not reading too much into early price action still applies, just with one more data point (a real pullback, not just an IPO pop) added to it.

Target Valuation Range

No independent fair-value range can be stated yet - only the market's own implied price, roughly Rs. 96,413.09 crore of market cap at ~24.5x TTM P/S and ~56.5x TTM P/E, can be reported. A missing balance sheet this quarter rules out a fresh enterprise-value calculation, and there still isn't a listed Indian peer at comparable scale to anchor a target range against - but this time the multiple is being paid against real trailing profit growth (roughly +24% like-for-like, not a base-effect illusion), a genuinely stronger footing than September's numbers suggested.

Using the December 31, 2025 close of Rs. 156.17 and Groww's post-IPO share count of approximately 6,173,598,591 shares (the 6,098,260,000 shares outstanding at the prior quarter's close, plus 75,338,591 new shares issued this quarter from stock-option exercises).

Market cap	Q3 FY2026 (Dec 2025)
Share price (period-end)	Rs. 156.17
Shares outstanding	6,173,598,591
Market capitalization	Rs. 96,413.09 crore (~$10.74B)

A full enterprise-value calculation isn't possible this quarter with verified, current data: as covered above, Groww's Regulation 33 filing for a non-half-year quarter doesn't include a balance sheet, so there's no verified December 31, 2025 cash or debt figure to net against market cap, and the last verified figures (September 30, 2025) are now stale - they predate this quarter's operating cash flows, the State Street proceeds (not yet received as of period-end), and Fisdom's first full quarter of consolidated cash activity. Rather than combine a fresh price with a five-month-old balance sheet, this post uses market-cap-based multiples only and will return to EV-based multiples once FY26's annual results (which will include a fresh balance sheet) are available.

Using trailing-twelve-month (TTM) figures - Q4 FY25 (derived: FY2025 full year minus the nine months ended December 31, 2024, both disclosed in this filing) plus the three quarters of FY26 reported so far - gives a more current read than anchoring on stale FY2025 annual numbers alone, as last quarter's post had to do before three quarters of post-IPO data existed:

Peer-multiple sanity check	Q2 FY2026 (FY2025 basis)	Q3 FY2026 (TTM basis)
Revenue	Rs. 3,901.72 crore (FY2025)	Rs. 3,940.22 crore (~$438.9M, TTM)
EV/Revenue or P/S	~23.9x (EV/Revenue)	~24.5x (P/S)
Profit (PAT)	Rs. 1,824.37 crore (FY2025)	Rs. 1,705.74 crore (~$190.0M, TTM)
P/E (at period close)	~52.8x	~56.5x
P/E (at Rs. 100 IPO issue price)	~33.5x	~36.2x

This quarter's P/S isn't directly comparable to last quarter's EV/Revenue - that figure netted out cash and debt, this one can't given the missing balance sheet - but it's in the same neighborhood, and still rich for a business whose headline profit metric (on an unadjusted basis) just declined, even though the adjusted, like-for-like read is growth, not decline. Both TTM P/E figures reflect reported profit, which still carries the effect of last year's one-time reversal fading in and out of the trailing window; the underlying, adjusted growth rate (EBITDA +24% YoY this quarter) is a steadier number to anchor expectations on than either P/E figure alone.

Both multiples assume the Fisdom wealth-distribution integration and the newly announced State Street/Groww AMC partnership both scale roughly as management describes, at a valuation that's now been tested through one real post-IPO pullback (see Stock Price above) without materially re-rating down.

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