Groww Q2 Net Profit Dips 1.4% Sequentially to Rs 725 Crore as Closing Auction System Hits F&O Revenues

Billionbrains Garage Ventures, the parent company of India’s leading retail stockbroking platform Groww, posted a marginal sequential slowdown in its financial performance for the second quarter ended September 30, 2026. A drop in equity derivatives trading triggered by the rollout of the Closing Auction System (CAS) weighed on operational metrics, even as year-on-year expansion remained sharp.

Key Q2 FY27 Financial Highlights

For the July–September quarter (Q2 FY27), Groww reported:

• Net Profit: Consolidated profit after tax slipped 1.4% quarter-on-quarter to Rs 724.70 crore, compared to Rs 735 crore in Q1 FY27. On a year-on-year basis, net profit climbed 53.9% from Rs 471 crore in Q2 FY26.
• Revenue from Operations & Total Income: Total income fell 0.5% sequentially to Rs 1,541 crore from Rs 1,549 crore in the prior quarter, but rose 43.9% year-on-year against Rs 1,071 crore in Q2 FY26.
• Operating EBITDA & Margins: EBITDA edged up 1% quarter-on-quarter to Rs 968 crore from Rs 960 crore, with EBITDA margins expanding 60 basis points sequentially to 64.5%.
• Stock Reaction: Following the announcement, Groww shares traded marginally lower on the BSE at around Rs 192.70 to Rs 195.30 apiece.

The CAS Headwind on Derivatives

The primary sequential drag on Groww’s performance stemmed from its equity derivatives vertical, where revenue dropped 14.3% quarter-on-quarter. The share of equity derivatives in total income shrank by 12.2 percentage points year-on-year, declining from roughly 57% in the previous year to 45% during the quarter.

Management attributed the drop directly to the market-wide impact of the Closing Auction System (CAS) implemented in August 2026. Under CAS, cash-market continuous trading for eligible futures and options (F&O) stocks concludes at 3:15 PM, whereas equity derivatives trade through 3:40 PM. The resulting mismatch between underlying cash execution and derivatives trading complicated price discovery and risk hedging during the final 25 minutes of the session, curbing trader participation.

In a shareholder communication, Groww noted that this decline in derivatives activity was consistent with wider industry-level contraction following the transition.

Relief on Horizon: SEBI’s Consultation Paper

Despite the near-term headwind, management expressed optimism about a rebound in trading volumes, pointing to recent regulatory proposals by the Securities and Exchange Board of India (SEBI).

SEBI’s latest consultation paper recommends delinking the settlement price of derivatives contracts from the cash-market closing auction prices determined under CAS. If notified and enacted, the revision is expected to address structural hedging imbalances and restore normalized trading flows across high-frequency and retail derivatives traders alike.

Broader Diversification Cushions Impact

While derivatives revenue faced friction, Groww continued to build buffers through other retail offerings:

• Primary Markets: The platform added 11 lakh new transacting users (NTUs) in the quarter, buoyed by heavy equity initial public offering (IPO) activity. Roughly 42 lakh users submitted IPO applications via Groww, capturing a 22% market share of all equity allotments.
• New Verticals: The company witnessed steady volume uptake in its Margin Trading Facility (MTF) books as well as commodity derivatives contracts.
• Wealth & Asset Management: Groww’s wealth management assets crossed the Rs 10,000 crore milestone, while Groww Asset Management Company’s (AMC) assets under management jumped 145% year-on-year to Rs 7,179 crore, up from Rs 2,928 crore a year earlier.

While cost pressures rose due to additional trading days and elevated tech and computer costs, the brokerage's operating leverage and widening multi-asset footprint helped it maintain a healthy profit after tax margin of 47%.

Tags: Groww Billionbrains Garage Ventures SEBI NSE BSE Brokerage Derivatives