Groww's Q2 FY26: Navigating Growth Amidst Market Shifts

Groww, operating as Billionbrains Garage Ventures Limited, has released its Q2 FY26 earnings, showcasing a period of strategic expansion and operational adjustments. Despite a 9% year-on-year decline in revenue from operations, the company reported a robust 12% year-on-year growth in Profit After Tax (PAT). This performance reflects Groww's ability to enhance efficiency and adapt to evolving market and regulatory landscapes, even as it continues its aggressive product diversification and user acquisition strategies. The total income for Q2 FY26 stood at ₹1,018.7 crore, with a PAT margin of 44%, broadly in line with the full year FY25 PAT margin.

The company's growth narrative in Q2 FY26 was primarily driven by a significant increase in Active Users and enhanced engagement from its existing customer base. Total Transacting Users surged by 27% year-on-year to 19 million, while Total Customer Assets grew by an impressive 33% year-on-year, reaching ₹2.7 lakh crore. This indicates strong underlying demand and successful user retention. Groww's market share in NSE Active Users also expanded to 26.6% from 25.6% in Q2 FY25, signaling continued competitive strength. However, the decline in industry-wide NSE Active Users, including Groww's own, was acknowledged, with management viewing it as a lag metric and believing the company is at an inflection point.

Groww's strategic focus on product diversification is evident in its Q2 FY26 performance. While Equity Derivatives still constitute the largest portion of revenue at 57%, products like Stocks (19%), Float (7%), PL + LAS (6%), Treasury (5%), MTF (3%), and Other Income (3%) are increasingly contributing to the revenue mix. This diversification is a direct response to regulatory changes, such as the 'True-to-label' circular, which impacted derivatives revenue per order. The company is actively expanding its offerings to reduce reliance on any single product category.

New product launches and initiatives played a crucial role in this diversification. The Margin Trading Facility (MTF) book grew substantially to ₹1,668.3 crore, with 78,000 active users, capturing a 1.7% market share. Groww expects continued growth in MTF, aiming for a fair market share aligned with its Stocks Average Daily Turnover (ADTO). The introduction of Bond IPOs in June 2025 has already secured a 5-6% market share in retail allocations. Furthermore, Commodity Derivatives, launched in September 2025, quickly garnered 7-8k average Daily Transacting Users. The company also launched Loan Against Securities (LAS) on its own book in Q2 FY26, leading to ₹144.4 crore in disbursements and serving 9.8k customers.

The acquisition of Fisdom (Finwizard Technology Private Limited) in October 2025 marks Groww's significant push into wealth management. While its P&L impact will be reflected from Q3 FY26, Fisdom's previous top-line of ₹166.3 crore highlights its potential. This move is aimed at catering to the emerging segment of affluent users who require specialized wealth products like AIF, PMS, and advisory services. Management emphasizes a tech-led approach to wealth management, focusing on seamless customer experience and product discovery.

Despite the positive developments, Groww faced challenges, including a higher Customer Acquisition Cost (CAC) in H1 FY26, which stood at ₹1,374 compared to ₹796 in H1 FY25, largely due to increased performance marketing spend. However, management remains confident in its long-term strategy, emphasizing that India's financial market participation is still nascent, presenting a vast opportunity for growth. The company's commitment to a customer-first philosophy and continuous product innovation positions it to build India's largest investing and wealth platform, ensuring long-term value for its shareholders.