GROWW The Quarter a New SEBI Rule Broke a Five-Quarter Winning Streak

Twenty Minutes That Flatlined a Quarter

Every quarter Groww has disclosed numbers for since its November 2025 IPO - Q2 FY26 through Q1 FY27 - showed Profit After Tax growing sequentially: Rs. 471.34 crore, Rs. 546.93 crore, Rs. 686.35 crore, Rs. 735.04 crore. Q2 FY27 (the quarter ended September 30, 2026) is the first to break that pattern: PAT came in at Rs. 724.70 crore, down 1.4% quarter-over-quarter. Total Income (Rs. 1,540.54 crore, -0.5% QoQ), EBITDA (Rs. 968.51 crore, -0.2% QoQ) and the calculated Operating Income (Rs. 945.60 crore, essentially flat QoQ) all moved the same small amount in the same direction for the first time. None of these moves is large on its own - the business is still up 44-61% year-over-year across the board, the same headline growth it has posted every quarter - but four metrics flatlining or dipping in the same quarter, after five straight quarters of unbroken sequential growth, is a real data point, not noise.

Management names a specific, external cause. Effective August 3, 2026, SEBI replaced the Volume-Weighted Average Price method used to settle derivatives at market close with a Closing Auction System (CAS) - a 20-minute closing auction running from 3:15 PM to 3:35 PM. During the adoption phase, a gap opened up between the 3:15 PM reference price and the equilibrium price published from 3:20 PM, and trading volumes fell industry-wide. Groww's own Equity Derivatives revenue fell 14.3% quarter-over-quarter, and the company states plainly: "the bulk of which we attribute to CAS." Equity Derivatives has been Groww's single largest revenue-mix contributor in every quarter it has disclosed a breakdown, and its share of Total Income fell 12.2 percentage points year-over-year this quarter. Growth elsewhere - the Margin Trading Facility^» book grew 15.3% quarter-over-quarter to Rs. 4,351 crore, Commodity Derivatives gained mix share, and a wave of primary-market activity (42 lakh users applied for equity IPOs through Groww this quarter, a 22% market share of total allotments) lifted other income lines - absorbed most of the Equity Derivatives hit, which is why the company-wide numbers read as roughly flat rather than as an outright decline. SEBI's own consultation paper proposes delinking derivatives settlement from CAS closing prices, which, if adopted, should ease the disruption; until then, this is the first quarter where a regulatory mechanics change, not a demand or competitive problem, is the headline reason growth paused.

Two other threads tracked across the last three posts also moved this quarter. The State Street Global Advisors investment in Groww Asset Management Limited (Groww AMC) - tracked through CCI approval, then SEBI approval, then partial funding - fully closed on August 4, 2026, leaving Groww with its first-ever non-controlling interest on the balance sheet. And the long-running imprecision around Fisdom and Groww AMC's revenue picked up a new wrinkle: a board-approved corporate restructuring of the Fisdom/Finwizard entity group, landing in the same quarter Fisdom's platform integration was described as "completed." Both are covered in Beyond the Usual below.

The Prescription

Groww now has a real opening to finally close the three-quarter-old Fisdom/Groww AMC disclosure gap: the State Street deal is fully closed, the Fisdom integration is described as complete, and a board-approved scheme is about to reorganize the underlying legal entities anyway. Structural resets like this are exactly when a company either commits to cleaner segment reporting going forward or lets the reorganization become a permanent excuse for why the old numbers "don't map cleanly anymore." Groww AMC got a specific standalone revenue growth rate for the first time this quarter - 131% year-over-year - alongside a 145% AUM growth rate and a stated bottom-line loss (the subsidiary's own loss, on a different basis, was already disclosed back in Q4 FY26). Fisdom should get the same treatment next quarter, not another "it's part of Other Income."

What it should stop doing: publishing a cash-flow bridge in the shareholders' letter that shows a positive Rs. 1,568 crore "Operating Cash" figure for the same six months in which the audited-equivalent, limited-review Statement of Consolidated Cash Flows shows a negative Rs. 827.73 crore of net cash used in operating activities - with no definition of the deck's term and no stated reconciliation between the two. Netting loan-book growth out of a lending-adjacent business's cash flow is a defensible analytical choice - a bank's or NBFC's operating cash flow is normally read as tracking balance-sheet growth rather than profitability for exactly this reason; publishing a number that flips the statutory figure's sign without saying so is not.

Key Financial Metrics

Q2 FY27 (quarter ended September 30, 2026) vs. Q2 FY26 (quarter ended September 30, 2025) - consolidated, Ind AS, reported in INR crore and USD

This is a half-yearly filing point for Groww's April-March fiscal year (the six months ended September 30, 2026), so - unlike the single-quarter Q1 FY27 filing covered last post - it carries a fresh consolidated balance sheet and cash-flow statement, the first since the FY26 year-end audited statements. USD figures use the INR/USD rate on each period's own period-end date (Rs. 95.93/$1 for September 2026, Rs. 88.84/$1 for September 2025), not a single blended rate.

Metric	Q2 FY27	Q2 FY26	YoY
Revenue from Operations	Rs. 1,501.53 crore ($156.6M)	Rs. 1,018.74 crore ($114.6M)	+47.4%
Total Income	Rs. 1,540.54 crore ($160.6M)	Rs. 1,070.80 crore ($120.5M)	+43.9%
EBITDA¹	Rs. 968.51 crore ($100.9M)	Rs. 603.97 crore ($68.0M)	+60.4%
Operating Income²	Rs. 945.60 crore ($98.6M)	Rs. 586.14 crore ($66.0M)	+61.3%
Profit After Tax (Net Income)	Rs. 724.70 crore ($75.6M)	Rs. 471.34 crore ($53.1M)	+53.8%

¹ Defined the same way Groww has defined it since last quarter: profit for the period plus total tax expense, finance costs, depreciation and amortisation, and share of net loss of associate (net of tax), less other income. Rounds to Groww's own reported Rs. 969 crore. ² Not a reported statutory line item; calculated as Revenue from Operations minus Total Expenses, consistent with prior posts.

PAT is "Profit for the period/year" as Groww itself defines the term, before the deduction attributable to non-controlling interests (see Beyond the Usual for why that split exists for the first time this quarter). Profit attributable to Groww's own shareholders came to Rs. 725.65 crore, barely different (the minority share is a Rs. 0.95 crore loss). Basic EPS fell slightly to Rs. 1.17 from Rs. 1.19 last quarter (still up from Rs. 0.79 a year ago, +48.1% YoY); diluted EPS followed the same pattern (Rs. 1.15, vs. Rs. 1.17 last quarter, vs. Rs. 0.77 a year ago, +49.4% YoY).

Groww continues to report as a single reportable segment under Ind AS 108, unchanged from every prior quarter - the filing states plainly that "the Group does not distinguish revenues, costs and expenses between segments in its internal reporting."

Balance sheet (as at September 30, 2026, vs. March 31, 2026): Total assets rose to Rs. 19,792.01 crore from Rs. 18,540.93 crore (+6.7%), and total equity rose to Rs. 11,655.80 crore from Rs. 9,651.36 crore (+20.8%, driven by H1 FY27's profit plus the new non-controlling-interest equity from the State Street transaction). Cash and cash equivalents fell sharply, from Rs. 1,165.47 crore to Rs. 265.35 crore (-77.2%), and total debt (debt securities plus borrowings, excluding lease liabilities) fell from Rs. 224.01 crore to Rs. 21.00 crore (-90.6%) as scheduled repayments came due. Net cash (cash minus total debt) is now Rs. 244.35 crore, down from Rs. 941.46 crore in March - a genuinely large six-month swing, not a stale figure this time, and one this post's valuation section uses directly rather than cautiously.

Cash flow (six months ended September 30, 2026, cumulative - Groww does not disclose a standalone quarterly cash-flow statement): Net cash used in operating activities was Rs. 827.73 crore, against Rs. 152.76 crore a year earlier - almost entirely the result of continued MTF/personal-loan/Loans Against Securities^» book growth (loans receivable grew by Rs. 1,915.32 crore over the half-year), the same loan-book-growth-not-weakness dynamic flagged in the FY26 annual post, just at a much larger scale this time. Free cash flow (operating cash flow minus capex of Rs. 9.85 crore) comes to roughly -Rs. 837.58 crore for the six months - not a quarterly figure, since the cash-flow statement is only disclosed at the half-year mark.

Key Operational Metrics

Q2 FY27 vs. Q2 FY26 unless noted

Metric	Q2 FY27	Q2 FY26	YoY
Total Transacting Users (cumulative)	2.4 crore (24.0M)	~1.9 crore (implied)	+27%
Total Customer Assets	Rs. 3,90,000 crore (~$40.65B)	~Rs. 2,67,000 crore (implied)	+46%
MF SIP Inflows	Rs. 14,347 crore	Rs. 11,254 crore	+27.5%
Stocks ADTO»	Rs. 14,430 crore	Rs. 10,129 crore	+42.5%
Equity Derivatives Premium ADTO	Rs. 12,322 crore	Rs. 9,574 crore	+28.7%
MTF» Book	Rs. 4,351 crore	Rs. 1,668 crore	+160.9%

Market share rose across every disclosed product again: MF SIP inflow share from 13.1% to 14.8%, Stocks ADTO retail market share from 12.9% to 15.4%, Equity Derivatives Premium ADTO retail share from 8.6% to 11.0%, and MTF book share from 1.6% to 2.7%. Groww added 11 lakh New Transacting Users this quarter, which it attributes to the primary-market activity noted above rather than a change in the base business. Groww AMC's own AUM grew 145% year-over-year to Rs. 7,179 crore (up 30.7% quarter-over-quarter from Rs. 5,491 crore in Q1 FY27), with the share of actively managed AUM rising from 47% to 57%; AMC revenue grew 131% year-over-year, while its own bottom-line loss came to Rs. 8.3 crore - not directly comparable to the Rs. 21.4 crore figure Groww AMC posted on its own as recently as Q4 FY26, since that figure was stated on an EBITDA basis (Fisdom's own EBITDA loss that quarter, Rs. 10.2 crore, was reported separately) rather than the bottom-line/net-loss basis the shareholders' letter uses this quarter. Wealth Assets (across Groww's Bonds/MF Prime, the "W" affluent platform, and Fisdom) crossed Rs. 10,000 crore this quarter, per the shareholders' letter, with no further breakdown given. Commodity Derivatives active users were not separately disclosed this quarter, unlike in Q1 FY27's post.

On the expense side, the shareholders' letter's own (non-GAAP, Groww-AMC-excluded) expense walk shows total expenses roughly flat quarter-over-quarter (Rs. 510 crore to Rs. 514 crore): a Rs. 15 crore increase in Cost to Serve from higher trading days plus a Rs. 13 crore one-time client reimbursement "stemming from an operational issue at a third-party Market Infrastructure Institution" (see Beyond the Usual), a Rs. 13 crore AI-related increase and a Rs. 5 crore CSR-driven increase in Cost to Operate (with a further ~Rs. 28 crore of CSR spend flagged for H2 FY27), offset almost entirely by a Rs. 42 crore drop in Cost to Grow now that the two months of IPL cricket-sponsorship spend flagged in the Q1 FY27 post has rolled off. This expense figure is narrower than the statutory Rs. 555.93 crore Total Expenses line above, since it excludes Groww AMC and excludes finance costs and D&A.

Beyond the Usual

This is a half-yearly (not annual) Regulation 33 filing, so the notes are fewer than a full annual report but real: two material notes (the State Street transaction's completion and a board-approved corporate restructuring), plus color from the shareholders' letter's Q&A and expense walk.

The State Street/Groww AMC investment fully closed, and Groww AMC itself got its most specific disclosure yet

Following CCI approval (March 2026) and SEBI approval (June 1, 2026) - both tracked in the last two posts - this filing discloses that "all conditions precedent and closing conditions under the transaction documents were duly fulfilled and the transaction was completed on 04 August 2026." State Street Global Advisors, Inc. (SSGA) now holds voting rights of 4.85% and an economic interest of 22.94% of Groww AMC's fully diluted share capital, confirmed by the shareholders' letter's own statement that Groww "received an investment of ₹580 crores this quarter from State Street Global Advisors, Inc." - the full commitment flagged as still partly pending as of last quarter's post. Groww AMC itself also got a specific standalone revenue growth rate for the first time (131% year-over-year), alongside a specific bottom-line figure (a Rs. 8.3 crore loss, stated on a different basis than the EBITDA loss the AMC disclosed back in Q4 FY26), in the shareholders' letter's own Q&A - a genuinely more precise disclosure than the AMC has received in any prior quarter, even if it stops short of a full P&L.

A first-ever non-controlling interest, and a gain that shows up in one set of books but not the other

The State Street transaction left Groww's consolidated balance sheet with a non-controlling interest^» balance of Rs. 87.79 crore as at September 30, 2026 - zero as at March 31, 2026, and the first time this line item has appeared in Groww's consolidated accounts. Separately, Groww's standalone financial results (the parent entity's own books, not the consolidated Group) recognized "a gain on sale of investment in subsidiary of INR 81.10 crores" from the same transaction. That gain does not appear anywhere in the consolidated profit and loss statement. This isn't an inconsistency - it's the correct Ind AS 110 treatment for a change in ownership interest in a subsidiary that doesn't result in a loss of control (SSGA's stake is well short of a controlling interest, so Groww AMC stays fully consolidated): the difference between what SSGA paid and the proportionate adjustment to non-controlling interest is booked straight to equity, not to profit or loss, at the Group level. The filing doesn't spell out this reconciliation anywhere - a reader comparing the standalone and consolidated numbers without knowing the rule would have no way to explain why one set of books shows an Rs. 81.10 crore gain and the other shows nothing.

A board-approved corporate restructuring lands in the middle of the Fisdom disclosure question

The Board approved a Composite Scheme of Arrangement that will (i) demerge identified business undertakings of Finwizard Technology Private Limited ("FTPL," the entity behind Fisdom) into Groww Wealth Tech Private Limited and Fisdom Broking Private Limited (formerly Groww Insurance Broking Private Limited), and (ii) amalgamate two further step-down subsidiaries (Finwizard Technology Services Private Limited and Finwizard Securities Private Limited) into FTPL. The appointed date is April 1, 2027, all entities involved are wholly-owned or step-down subsidiaries, and the filing states the scheme "does not have any impact on the shareholding, control or economic interest of the Company," with no effect considered in these results. The timing is notable regardless: this restructuring of the Fisdom/Finwizard entity group lands in the same quarter the shareholders' letter describes the Fisdom platform integration as "completed," and in the same filing that finally gave Groww AMC - but not Fisdom - a specific revenue growth rate and bottom-line figure. A reorganization of legal entities that splits and merges pieces of the same business group is, at minimum, as likely to make a future revenue breakdown harder to produce as easier, and the company has not said which.

A shareholders'-letter cash-flow bridge that doesn't match the audited-equivalent cash-flow statement

The shareholders' letter's own "Cash Flow Walk" for H1 FY27 shows a positive Rs. 1,568 crore bucket labeled "Operating Cash," ahead of separate buckets for MTF/personal-loan/LAS book growth (-Rs. 1,915 crore), debt repayment (-Rs. 203 crore), capex and working capital (-Rs. 74 crore) and the State Street investment (+Rs. 580 crore), which together bridge the company's own broader "Cash Balance" measure from Rs. 3,893 crore to Rs. 3,849 crore. The audited-equivalent Statement of Consolidated Cash Flows for the same six months shows "Net cash used in operating activities" of negative Rs. 827.73 crore - the opposite sign from the deck's "Operating Cash" figure for the identical period. The gap is explained by definition, not error: the statutory cash-flow statement nets loan-book growth into operating activities, while the deck's walk buckets loan-book growth separately. That's a defensible choice for a business with a lending line - a bank's or NBFC's negative operating cash flow is not normally read as a standalone red flag either, for the same reason - but neither the glossary at the back of the shareholders' letter nor anywhere else in the document defines "Operating Cash," and nothing reconciles the two figures for a reader working from the deck alone.

Promoters sought reclassification to "Public," with no names or percentages disclosed

The Board approved "requests for reclassification of certain promoter group members" from the Promoter Group category to the Public category, following an October 12, 2026 intimation, "subject to receipt of necessary approvals as prescribed under Regulation 31A of the SEBI Listing Regulations." The filing names no individuals and no shareholding percentages. Promoter-to-public reclassification is a disclosed, routine regulatory process in India and doesn't by itself indicate anything adverse, but it is also the kind of step that can precede a reduction in promoter holding once the reclassified shares are no longer subject to promoter-specific disclosure and lock-in rules - worth watching for who, and how much, in a future filing.

A third party's trading-system issue cost Groww's own clients money, and Groww picked up the bill

Groww's Cost to Serve this quarter included a one-time client reimbursement of roughly Rs. 13 crore "stemming from an operational issue at a third-party Market Infrastructure Institution" - unnamed, but India's Market Infrastructure Institutions are the exchanges, depositories and clearing corporations. Groww doesn't disclose the mechanics of the underlying incident or whether it will seek recovery from the institution responsible, but it chose to make its own clients whole rather than leave them to absorb a cost caused by a counterparty's system. A small, one-off number (0.8% of the quarter's Total Income) with no further detail, worth filing away rather than ignoring if a similar line item recurs.

Target Valuation Range

DCF fair-value range (unchanged from last quarter's build): roughly Rs. 34,459-77,061 crore (base case ~Rs. 56,884 crore) - against a market cap now at roughly Rs. 114,798 crore. Still overvalued by every method tried, but less dramatically than last quarter: a roughly 9% share-price pullback this quarter did more to close the gap between price and modeled fair value than three months of flat-to-slightly-lower profit growth did to open it.

GROWW.NS fell from Rs. 202.07 at the end of Q1 FY27 to Rs. 183.91 at the end of Q2 FY27 (September 30, 2026) - a 9.0% decline, moving lower in each of the quarter's three months (Rs. 194.37 in July, Rs. 192.06 in August, Rs. 183.91 in September). This is a smaller move than last quarter's 34.6% rally and doesn't warrant its own section, but it matters for the valuation math below: unlike the stale, six-month-old net cash figure used in last quarter's post, this quarter's net cash comes from a fresh balance sheet (see Key Financial Metrics).

Using the September 30, 2026 close of Rs. 183.91 and approximately 6,242.10 million shares outstanding (Groww's September 30, 2026 paid-up equity share capital of Rs. 1,248.42 crore at Rs. 2 face value, divided by the face value - the same point-in-time, non-diluted count basis used in every prior post, since Groww does not separately disclose a diluted share count in its quarterly filings; the count rose slightly from 6,239.05 million in March 2026 on ESOP-related issuance, per the filing's own notes):

Market cap → enterprise value	Q1 FY2027 (Jun 2026)	Q2 FY2027 (Sep 2026)
Share price (period-end)	Rs. 202.07	Rs. 183.91
Shares outstanding	6,239.05 million	6,242.10 million
Market capitalization	Rs. 126,072 crore (~$13.28B)	Rs. 114,798 crore (~$11.97B)
Net cash	~Rs. 941.46 crore (stale, from the March 2026 balance sheet)	~Rs. 244.35 crore (fresh, from the September 2026 balance sheet)
Enterprise value	~Rs. 125,131 crore (~$13.18B)	~Rs. 114,554 crore (~$11.94B)

Market cap is down 8.9% from June 30, almost exactly tracking the 9.0% share-price decline since the share count barely moved. Net cash fell by nearly three-quarters over the same period (see Key Financial Metrics and Beyond the Usual for why), but it's still a small enough number relative to market cap that it barely moves the enterprise-value bridge either way.

A fresh DCF isn't rebuilt this quarter - the underlying cash-flow assumptions in the Q4 FY26 build (a WACC of roughly 14.5%, growth tapering from the mid-20s toward a 5% terminal rate) are now unchanged for a third straight quarter. That's a real limitation worth stating plainly rather than leaving unremarked: H1 FY27's cash-flow data is now available for the first time since the FY26 annual filing, and it hasn't been folded into a refresh of the underlying model, only into the current-quarter EV used to compare against it.

Scenario (unchanged from last quarter)	Key assumption	Implied DCF value	vs. actual EV (~Rs. 114,554 crore)
Current (period-end close)	— actual market price, for reference	~Rs. 114,554 crore (EV)	—
Bear	Growth tapering from 15% to 6%; WACC 15.5%	~Rs. 34,459 crore	~30.1% of EV
Base	Revenue-linked cash-flow growth tapering from 25% to 13%; WACC 14.5%	~Rs. 56,884 crore	~49.7% of EV
Bull	Growth tapering from 32% to 16%; WACC 13.5%	~Rs. 77,061 crore	~67.3% of EV

The base case now covers roughly half of today's EV, up from about 45% last quarter - not because the business's modeled cash-flow trajectory improved, but because the price fell further than three months of actual profit growth closed the gap. Even the bull case still sits about 32.7% below today's EV.

Using trailing-twelve-month (TTM) figures - Q3 FY26 through Q2 FY27, the same four-quarter window used last quarter, rolled forward by one quarter:

Peer-multiple sanity check (TTM)	Q1 FY2027 (Jun 2026)	Q2 FY2027 (Sep 2026)
Revenue	Rs. 5,241.60 crore (~$552.1M)	Rs. 5,724.39 crore (~$596.9M)
P/S	~24.1x	~20.1x
EBITDA	Rs. 3,275.60 crore (~$345.1M)	Rs. 3,619.69 crore (~$377.5M)
EV/EBITDA	~38.2x	~31.6x
PAT (TTM)	Rs. 2,439.67 crore (~$257.0M)	Rs. 2,693.03 crore (~$280.7M)
P/E (TTM)	~51.7x	~42.6x

All three multiples compressed meaningfully this quarter - P/S from 24.1x to 20.1x, EV/EBITDA from 38.2x to 31.6x, P/E from 51.7x to 42.6x - a combination of the share-price pullback and a full year of post-IPO trailing profit now in the TTM window (TTM PAT rose another 10.4% quarter-over-quarter even as the single quarter's own PAT dipped, since the window dropped the weaker Q2 FY26 quarter and picked up the stronger Q2 FY27 one). That's a genuine de-rating, not just an arithmetic artifact of a smaller numerator - but a stock trading at over 40x trailing earnings and more than 30x trailing EBITDA, on a business whose own quarter-over-quarter growth just stalled for the first time, is still a long way from cheap by any of the three methods tried here.

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