Summary
Billionbrains Garage Ventures Limited (Groww) - Q3 FY26 Earnings Call Summary Wednesday, January 14, 2026 4:00 PM
Event Participants
Executives 6 Harsh Jain (Co-Founder and COO), Ishan Bansal (Co-Founder and CFO), Kunalraj Singh Chhabra (Head of Investor Relations), Lalit Bhimani (Group Head, Finance), Lalit Keshre (Co-Founder and CEO), Neeraj Singh (Co-Founder and CTO)
Analysts 11 Abhijeet Sakhare, Dipanjan Ghosh, Gaurav Jain, Gaurav Singhal, Harshad Toshniwal, Madhavan S, Madhur Sharma, Mayank Agarwal, Pranuj Shah, Prayesh Jain, Supratim Datta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | Not Disclosed | Increased QoQ; driven by growth in new businesses and high activity in commodities and IPOs. |
| Net Profit | Not Disclosed | Increased QoQ; decreased YoY due to a one-off reversal impact in the previous year. |
| Commodities Revenue | 4% of total | Scaled from zero since September launch; attributed to interest in gold and silver assets. |
| MTF Book Contribution | 6% of total | Added ~₹600 crores per quarter for the last three quarters; momentum expected to continue. |
| Equity Orders | 2.30 million/day | Increased QoQ; performance bolstered by heavy IPO flow and ETF activity. |
| Derivative Orders | 5.40 million/day | Sharp uptick in daily orders following regulatory changes (lot size increases/expiry reductions). |
| Yield per Stock Order | ~₹19.90 | Management noted yield improvement on the stock side during the quarter. |
| Active F&O Users | 1.47 million | Decreased from ~2.00 million; attrition concentrated in small-ticket traders following new SEBI rules. |
| Employee Count | 1,350 count | Reduced by 20 employees QoQ (excluding Fisdom); reflects ongoing operational optimization. |
| EBITDA Margin | ~63% | Expanded as revenue grew significantly faster than the fixed cost base. |
Geographic & Segment Commentary
- Broking & Allied: Sustained growth with a shift toward higher-value traders; the ratio of transacting users to active users improved to ~68%. The segment benefited from a surge in IPO applications and the nascent but fast-growing commodity derivatives piece.
- Asset Management (Groww AMC): Currently in early-stage growth with a focus on scaling AUM through new retail customer acquisition. The segment will be the primary vehicle for the State Street partnership to introduce global investment practices and passive products.
- Wealth Management (Fisdom): Consolidated from October 2025; currently generating ~₹29 crores in quarterly revenue. Strategy involves cross-selling regular mutual funds, PMS, AIF, and unlisted products to Groww’s affluent customer base while maintaining zero acquisition costs for internal migrations.
Company-Specific & Strategic Commentary
- State Street Partnership: Proposed strategic stake sale and fresh capital infusion by State Street to build global investment capabilities and credibility in the AMC business. Proceeds will fund organic scaling and potential inorganic M&A opportunities within the asset management space.
- Wealth Integration: Ongoing integration of Fisdom to cater to the affluent/HNI segment. Focus remains on building high-end advisory tech and distributing premium products (AIF/PMS) through existing Groww and Fisdom channels.
- Commodities Expansion: Achieved double-digit notional market share within months of launch. Management identified commodities as a key tool for periodic user reactivation, particularly during periods of equity volatility.
- Tech Infrastructure: Launched “Groww Lite” as a reliability measure, allowing users to view and square off positions during technical glitches or high-latency periods, specifically targeting active traders.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Fixed Cost Growth | 10% - 20% annual increase | Driven primarily by employee appraisals and inflationary impact on marketing/tech spend. |
| MTF Book | ~₹600 cr addition per quarter | Assumes continued market volatility; growth could accelerate if a broader market rally occurs. |
| Dividend | No payout in near future | Company remains in a high-growth phase and intends to reinvest capital into new business lines. |
| EBITDA Margin | Output-driven, no specific target | Margin expansion expected to continue if revenue growth outpaces the mostly fixed cost structure. |
Risks & Constraints
| Risk | Context |
|---|---|
| Open Interest (OI) Limits | Regulatory limits restrict single-broker OI to 15% per exchange/contract. Management noted they currently operate at ~50% of this limit on major indices like Nifty/Sensex. |
| Regulatory Changes | Recent SEBI norms on F&O (lot sizes/expiries) caused a drop in active derivative users from ~2m to 1.47m. While yields increased, total user participation in the segment remains sensitive to further regulatory tightening. |
| Market Cyclicality | Revenue is highly dependent on market volatility and IPO cycles. A prolonged market downturn would impact both the broking volumes and the MTF book growth. |
Q&A Highlights
AMC Strategy & State Street
- Question: What is the roadmap for the AMC and how does State Street change the trajectory? (Supratim Datta)
- Answer: State Street brings global practices and credibility. We aim to scale AUM and user base by launching passive and global products. The capital provides a buffer for organic growth and inorganic M&A. (Harsh Jain)
Wealth Segment Integration
- Question: Why does the Fisdom revenue run rate seem lower than last year? (Supratim Datta)
- Answer: Consolidation began in October; integration is ongoing. We expect synergies as the cost of acquiring affluent Groww users for wealth services is near zero. (Harsh Jain)
Operating Leverage & Margins
- Question: How should we think about the opex growth and margin progression? (Gaurav Singhal)
- Answer: Roughly 90% of our costs are fixed. Fixed costs should grow 10-20% via appraisals and inflation. If revenue grows faster, EBITDA margins will naturally expand. (Ishan Bansal)
F&O User Cohorts
- Question: Which cohorts are driving the rise in premium ADTO despite fewer active users? (Pranuj Shah)
- Answer: Post-regulation, small-ticket traders left. The remaining 1.47m active users are higher-ticket; 80% are “older” cohorts acquired pre-2024 who survived the regulatory shift. (Ishan Bansal)
Key Takeaway
Billionbrains Garage Ventures (Groww) delivered a quarter characterized by high operating leverage, with EBITDA margins expanding significantly as fixed costs remained stable against rising revenues. While regulatory changes in the F&O segment reduced the active derivative user base to 1.47 million, the quality of participation improved, with premium ADTO per user trending upward. Strategically, the company is pivoting toward the affluent market through the consolidation of Fisdom (Wealth) and a major partnership with State Street for its AMC business, which currently sees its MTF book contributing 6% to total revenue with quarterly additions of ₹600 crores. Management remains focused on multi-product cross-selling—evidenced by the 4% revenue contribution from the newly launched commodities segment—to insulate against equity market cyclicality. Looking ahead, Groww intends to reinvest all profits into scaling these new verticals, maintaining a cautious but opportunistic stance on marketing spend while monitoring regulatory open interest limits. For the next fiscal year, the company’s ability to transition its mass-market base into premium wealth products will be the key driver of non-broking revenue growth.
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