Groww's Strong Q3 Performance Backs Its Premium Market Valuation
Groww, operated by Billionbrains Garage Ventures Ltd, has delivered impressive results for the December quarter of FY26. The company's broking orders continue to rise sharply, providing solid support for its high valuation in the market.
Broking Orders Show Accelerated Growth
In Q3FY26, Groww's broking orders increased by 14% quarter-on-quarter, reaching 474 million. This growth rate accelerated from 10% in the previous September quarter. Notably, this achievement came despite fewer trading days in the quarter—62 days compared to 64 in Q2 and 61 in Q1.
Most broking orders generate a flat rate of ₹20 per order, making this metric a key indicator of performance. The growth in orders directly fueled a 15.7% quarter-on-quarter increase in platform or broking revenue, which hit ₹946 crore. This revenue stream now accounts for 75% of Groww's total income.
Revenue Breakdown and Market Shifts
Equity derivatives brokerage led the revenue growth, rising 9.5% quarter-on-quarter to ₹668 crore. This surge likely stemmed from faster growth in trading volumes, even as the active user base expanded at a slower pace of 5% to 1.48 million.
On a smaller base, cash market brokerage grew more rapidly at 11.5% quarter-on-quarter to ₹227 crore. However, its share in broking revenue dipped slightly to 24% from 24.9% in the previous quarter.
A significant development is the rise of commodity trading. Launched towards the end of Q2, it gained traction in Q3, with its share in broking orders jumping to 4.6% from just 0.3%. The buoyant sentiment for gold and silver has generally aided the commodity trading market.
Profitability and Financial Metrics
Groww's broking business demonstrates strong profitability. Almost all incremental revenue flows to EBITDA, as the company spends only 12.5% of client revenue on variable servicing costs. Consequently, EBITDA grew by 21% quarter-on-quarter to ₹757 crore. EBITDA stands for earnings before interest, taxes, depreciation, and amortization.
The company benefited from a 4% increase in the average daily turnover in the cash market on the National Stock Exchange, which rose to ₹99,270 crore. This uptick was partly driven by heightened interest in trading newly listed initial public offerings.
Strategic Moves Towards Financial Services
Groww is actively transitioning from a discount broking platform to a broader financial services powerhouse. Its efforts include expanding into asset management and wealth management.
In a recent strategic move, Groww sold a 5% stake in its subsidiary, Groww AMC, to State Street Global Advisors for ₹580 crore. State Street Global Advisors is the world's fourth-largest asset manager. This partnership could help Groww scale up its asset management business more quickly.
Valuation and Future Outlook
To justify its premium valuation—currently at 38 times its FY27 Bloomberg consensus earnings per share estimates—Groww must sustain its current high growth rate. The strong Q3 results lend credence to this valuation, but ongoing performance will be crucial.
Groww largely remains a discount broking platform for now, but its strategic shifts and robust quarterly growth signal a promising trajectory in the competitive financial services landscape.
