Inside Groww’s Revenue Mix: What Comes After Broking

In less than a decade since its launch in 2017, Groww has gone from just a mutual funds app to a super app of sorts when it comes to investment and wealth management.

With 1.31 Cr active broking clients and consistently staying profitable, it has built one of India’s largest retail investment ecosystems.

Now a listed company with one of the largest consumer bases and a market capitalisation of about ₹1.24 Lakh Cr, or roughly $14 Bn, Groww is no longer the small platform that was taking on the discount broking giants of the world. It is now one of the targets and a benchmark for smaller startups in this space.

In FY26, its operating revenue rose 19% to ₹4,644.6 Cr, while net profit increased 14% to ₹2,083 Cr, despite tighter regulations and higher taxes on futures and options.

However, Groww’s growth has not yet translated into a financial lead over Zerodha, its closest competitor. While Groww’s active broking clients are nearly twice Zerodha’s 68.47 Lakh, the order was reversed in the latest comparable full-year financials.

An FY26 comparison shows the gap is closer but Zerodha is still ahead. Zerodha’s net profit grew 1.2% to ₹4,283 Cr in FY26, while revenue stayed at roughly the FY25 level of ₹8,847 Cr, as per what founder and CEO Nithin Kamath said.

Compared to Groww, Zerodha’s revenue is about 1.9 times higher and its profit about 2.1 times larger, against roughly 2.3 times on both measures a year earlier. So the gap has narrowed between these two giants because Zerodha’s growth rate has slowed down.

Bridging this gap further is now central to Groww’s next phase. However, as it expands across several verticals simultaneously, its growth will depend not merely on launching new products but on turning them into meaningful and scalable revenue streams.

In fact, Zerodha is attempting a similar diversification shift, building secured lending, asset management and has filed an application for a merchant banking licence.

So Groww’s diversification is a natural consequence of the market, but whether the company does so faster than competitors is the real question.

The reported financials from Q1 FY27 provide a clearer picture of where that money is coming from. Consider this: stocks and equity derivatives together accounted for 75.7% of Groww’s total income in Q1 FY26. By Q1 FY27, their combined contribution had fallen to 68.4%.

This decline did not reflect a contraction in these businesses, but the faster growth of newer revenue streams. In other words, Groww is gradually reducing its dependence on stockbroking and equity derivatives by adding new sources of income, even as the two core businesses continue to grow in absolute terms.

Diversification On The Anvil

Brokerage Motilal Oswal expects Groww’s newer businesses to grow faster than broking. A report from January 2026 when the brokerage initiated coverage projected revenue of approximately ₹7,980 Cr by FY28, with broking expected to contribute 67% by then.

“We further expect its revenue to double over FY25-28,” the brokerage said in its report.

But that’s still an analyst estimate rather than guidance from Groww itself. This projection also assumes that margin trading, commodities, credit and wealth management will become material contributors over the next two years. But that is yet to be seen in terms of actual absolute revenue volume.

Even when we assume that this forecast counts in the revenue diversification, it would seem that the new revenue streams do not carry the weight of this projection.

For instance, it implies that broking would contribute 67% of revenue in FY28, which is just marginally below 68.4%, the figure as of Q1 FY27.

So the revenue mix is only changing by a shade or two and not very dramatically. Plus, on an annualised basis, the Q1 FY27 operating revenue of ₹1,501.4 Cr comes up to about ₹6,000 Cr, against a projection of ₹7,980 Cr by Motilal Oswal as of FY28.

That would require a huge revenue jump and assumes that Groww will outcompete new players which eat away at market share with user acquisition drives.

The revenue equation changed very early on for Groww after it received its broking licence in March 2020 and entered stockbroking in June that year. The company turned profitable for the first time in FY21, posting a net profit of ₹2.72 Cr. In October 2021, it raised $251 Mn in a Series E round led by ICONIQ Growth at a valuation of $3 Bn. From there, Groww continued expanding its financial services business.

Along the way, Groww merged its US holding company, Groww Inc., with its Bengaluru-based Indian entity, Billionbrains Garage Ventures. The reverse flip aligned the company’s holding structure with its Indian operations and prepared it for a domestic listing.

The move, however, came at a steep cost. Groww recognised a one-time US tax expense of ₹1,339.7 Cr in FY24, pushing it to a net loss of ₹805 Cr despite remaining profitable at the operating level. With the one-time charge behind it, Groww returned to profitability in FY25.

Building The Product Stack

Between 2020 and 2026, Groww expanded beyond stocks and mutual funds into equity and commodity derivatives, margin trading facility (MTF), intraday and API-based trading, and credit products such as personal loans and loans against securities.

It earns brokerage and transaction fees from trading, interest and fees from MTF and credit, and commissions or distribution income from select financial products.

Not every experiment worked. Groww discontinued fixed deposits after limited adoption and its earlier US stock-investing product after remittance requirements, withdrawal fees and settlement delays affected the customer experience. It is now preparing to relaunch US stock investing through GIFT City.

Two acquisitions along the way took Groww beyond distributing third-party financial products.

In 2023, it completed the acquisition of Indiabulls’ AMC business for ₹175.6 Cr, giving it an asset management licence and the ability to manufacture and manage its own mutual fund schemes.

The acquisition of Fisdom for ₹961.05 Cr in 2025 added institutional distribution, bank partnerships and wealth-management capabilities. Groww also launched W in June 2025, a wealth-management service for affluent and high-net-worth investors.

Then, it piloted MF Prime in January 2026 and rolled it out more widely in July. The service combines an in-house research desk and artificial intelligence to offer personalised mutual fund guidance.

These businesses expanded Groww’s revenue model beyond brokerage. The question, now, is which of these businesses can generate meaningful revenue in the near term and meet the growth expectations of the market.

Scaling Products To Revenue

The immediate answer is unlikely to be direct mutual fund distribution, which continues primarily to serve as a customer-acquisition, engagement and retention engine.

Groww’s asset management company can earn management fees from the mutual funds it manufactures. Similarly, W, Fisdom and potentially MF Prime can generate advisory, management, subscription or distribution income. But these businesses are not yet large enough to drive Groww’s near-term revenue.

The asset management business could become a key lever. State Street agreed to acquire 23% of Groww AMC for ₹580 Cr in January 2026, valuing the unit at about ₹2,500 Cr despite its losses. Groww also bid for PGIM India’s asset management business in January, which would add scale inorganically. The longer-term case for the business is as a strategic hedge against slow down in F&O or broking.

Fisdom and Groww AMC remained small contributors in Q1 FY27, when Groww’s operating revenue stood at ₹1,501.4 Cr. During the Q1 FY27 earnings call, CFO Ishan Bansal said Fisdom had not yet recorded a significant improvement in revenue since the acquisition and remained in a gestation phase.

In the preceding quarter, Fisdom and Groww AMC reported operating losses of ₹10.2 Cr and ₹21.4 Cr, respectively. Groww expects Fisdom to turn profitable in FY28.

On the asset management business, the company said, “For it to be profitable, we need to grow our AUM 5–6x and this is expected to be achieved over the next few years.”

By comparison, Zerodha Fund House manages about ₹13,133 Cr. FY26 operating revenue rose 78.7% to ₹16.8 Cr and its loss narrowed 37.8% to ₹5.1 Cr.

Excluding Fisdom and Groww AMC, Groww’s platform revenue increased from ₹904 Cr in Q1 FY26 to ₹1,473 Cr in Q1 FY27. Consequently, platform EBITDA almost doubled from ₹499 Cr to ₹999 Cr, with the margin expanding from 55.2% to 67.8%, according to Groww’s Q1 FY27 shareholder letter.

At the consolidated level, total expenses increased 25% year-on-year to ₹555.7 Cr in Q1 FY27, considerably slower than the 66% growth in operating revenue.

Groww’s expenses are therefore increasing in absolute terms, but its revenue is currently growing faster. This leaves three businesses that are already showing measurable scale: margin trading, commodity derivatives and credit.

Margin Trading Facility Brings The Strongest Opportunity

The margin trading facility’s (MTF) contribution to total income increased from 3% in Q1 FY26 to 8% in Q1 FY27. On Groww’s reported total-income base, this translates into around ₹124 Cr.

As per disclosures, the funded MTF book surged 264% year-on-year to ₹3,775 Cr from ₹1,036 Cr, while Groww’s industry share increased from 1.2% to 2.7%.

This remains well below Groww’s 15.1% share of stock-trading turnover, highlighting the opportunity to cross-sell MTF to existing investors. However, active MTF users remained at around 1.3 Lakh between Q4 FY26 and Q1 FY27, indicating that the book’s growth was also driven by higher funding per customer.

In comparison, Zerodha’s MTF book grew to about ₹9,000 Cr in FY26, with customers borrowing about ₹6,000 Cr against it, and Angel One’s stood at ₹5,450 Cr. MTF now contributes about 10% of Zerodha’s revenue, against 8% of Groww’s total income.

Zerodha’s Nithin Kamath has publicly flagged the risk in the MTF boom for brokerages. “MTF is one area where the business growth is scaring me. The risk here is that the Indian markets could fall sharply. Leverage always looks great when markets are doing well, and the risks become obvious only when things go wrong.”

Unlike delivery trades, which generate one-time brokerage, MTF earns interest for as long as a position remains funded. Groww charges 14.95% annual interest, besides brokerage and pledge-related charges. During its Q1 FY27 earnings call, Groww said its cash-market yield had improved ≈5% year-on-year.

“We are seeing roughly ₹600 Cr to ₹700 Cr getting added on a quarterly basis on the book side,” CFO Ishan Bansal said.

However, MTF requires Groww to deploy capital and manage market, liquidity and customer-default risks. Its average MTF funding book increased 264.4% YoY to ₹3,775 Cr in Q1 FY27.

Following heightened volatility in Q4 FY26, Groww tightened limits across MTF and intraday trading during the quarter. Its profitability will therefore depend not only on book growth, but also on funding costs, collateral quality and its ability to contain losses.

There’s also the regulation factor. Groww’s shares fell after the RBI tightened lending norms for stock brokers, and rose in April when the regulator deferred implementation of the new capital-market rules. However, the segment Groww is relying on most is still exposed to a pending regulatory change.

Commodity Derivatives Is Scaling Fast

Groww introduced commodity derivatives in phases in September 2025. By month-end, 7,000–8,000 users were transacting daily and placing eight to 10 orders each. The segment initially contributed less than 0.5% of total income.

Active commodity users increased from 2.55 Lakh in Q3 FY26 to 3.93 Lakh in Q4 FY26 and 4.35 Lakh in Q1 FY27. Its share of total income consequently rose from 3.5% to 4.5% and then 4.9%. On Groww’s reported total-income base, this translates into roughly ₹76 Cr in Q1 FY27.

Groww also captured 28.6% of retail commodity derivatives turnover across the Multi Commodity Exchange and National Stock Exchange, having only entered commodities in October 2025.

Commodities require less balance-sheet capital than MTF or credit because Groww primarily earns brokerage on trades. However, revenue remains dependent on order volumes and market volatility.

“The scale-up in commodities over the next few quarters will be a function of growth in user adoption and industry momentum. We are still early in this journey,” Groww said in its Q4 FY26 shareholder letter.

Higher activity also raises transaction and servicing expenses. Groww’s Q3 FY26 shareholder letter said these costs increased partly because commodities scaled faster than expected. Therefore, while commodities offer a relatively capital-light source of brokerage revenue, they lack MTF’s recurring interest income and remain sensitive to trading activity.

The Secured Lending Bridge 

Personal loans and loans against securities (LAS) contributed 5.5% of Groww’s total income in Q1 FY27.

On Groww’s reported total-income base, this translates into ₹85 Cr, compared with ₹62.6 Cr a year earlier. Groww distributes loans from partner lenders for fees and also originates loans through its own non-banking financial company, Groww Creditserv Technology, earning interest and processing charges.

But it must be noted that the share of income for the lending segment has declined. It was about 6.7% of Q1 FY26 income, against 5.5% in Q1 FY27. The segment grew roughly 36% in absolute terms, but total income grew faster.

Unlike margin trading and commodities, credit is contributing a smaller share of income than a year earlier, which makes its role in diversification a bit weak. Nonetheless, it’s a major opportunity for Groww

Loans against securities connects Groww’s investment and lending businesses by allowing customers to borrow against securities held on the platform. Its in-house NBFC’s disbursements increased 26.1% sequentially in Q1 FY27, with LAS accounting for about one-third.

“LAS is showing good growth, now it constitutes 34% in our disbursement,” cofounder Lalit Keshre said during the Q1 FY27 earnings call. Over the same period, secured loans increased from 13.5% to 18.5% of the portfolio.

For Groww, the focus on lending will increase as customer demand rises. This affects the quality and liquidity of eligible securities, funding costs and gives Groww greater ability to manage sudden declines in collateral values.

As LAS becomes a larger part of the portfolio, credit could add more recurring income while gradually making Groww’s lending book more secured. However, the disclosed numbers do not yet establish whether its returns can surpass those of brokerage.

The three engines, therefore, serve different purposes. MTF offers the strongest immediate route to recurring income from Groww’s existing stock customers. Commodity derivatives provide a faster, relatively capital-light source of brokerage growth. Credit creates a longer-term interest and fee pool, but requires more capital and risk management.

Together, they can reduce Groww’s dependence on equity derivatives. But the next rupee will depend not only on how quickly these products grow. It will also depend on whether Groww can scale them without allowing funding costs, market volatility and credit risks to erode the additional revenue they generate.

The Cost Of Becoming A Super App

While Groww has been operating profitably, diversification also introduces a different set of challenges.

Undoubtedly, Groww has reduced its concentration around stocks and equity derivatives, but it remains exposed to trading volumes, investor sentiment and regulatory intervention. That regulatory risk has already affected the industry as has been evident by the slower growth in the F&O business.

Stricter rules governing futures and options trading, including changes to contract sizes, weekly expiries, margins and transaction charges, have placed pressure on the economics of discount brokerages. These changes have reinforced the need for major discount brokerages such as Groww, Zerodha and Angel One to diversify beyond equity-derivatives income.

Operational and compliance setbacks add to this challenge. A January 2024 trading outage prevented users from placing orders and later resulted in a ₹34.12 Lakh SEBI settlement, without Groww admitting or denying the findings.

The platform also faced investor criticism over mutual fund holding and NAV-allotment discrepancies in 2024, raising concerns among traders over whether its technology and compliance systems can keep pace with its expanding user base.

Pertinent to note that such disruptions are not limited to Groww. Zerodha users reported glitches during a market rally in February 2026, amid the India-US trade deal.

Execution is another challenge, which we expect Groww will look to overcome in the next year or so to truly unlock operating leverage in the other revenue streams.

Groww is simultaneously building commodities, secured credit, wealth management, asset management, global investing, bonds, advisory products and AI-enabled services. Some of these businesses require regulatory licences and capital. Others require specialist talent and a higher degree of human advisory support.

However, Fisdom’s and Groww AMC’s losses show that each new vertical will not automatically inherit the economics of the core broking platform. Whether Groww can build several businesses simultaneously without stretching capital, management bandwidth and compliance infrastructure remains a key question.

For Groww, the next phase is moving a big segment or cohort of its customers towards higher-value services but doing so in a manner that does not weaken the low-cost structure that made the core platform profitable.

The fintech giant has a large customer base but unevenly monetised. Streamlining that into recurring interest, high-frequency and high-margin advisory services and asset-linked income is the next step that Groww will strive for.

[Edited by Nikhil Subramaniam]

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