Groww's revneue more than doubles to Rs 2,900 crore in FY24, profit jumps to Rs 298 crore

India's largest stockbroking firm Groww, which competes with Kamath brothers-led Zerodha, has more than doubled its revenue from Rs 1,295 crore in FY23 to Rs 2,900 crore in FY24, according to data from rating agency ICRA.

The company also reported a fourfold increase in net profit, rising to Rs 298 crore from Rs 73 crore in the previous fiscal year.

These results represent the standalone performance of Groww Invest-Tech Private Limited (GIT), which operates Groww's stockbroking business.

Surge in retail broking activities 

The surge in revenue is largely attributed to the increase in retail broking activities, which accounted for 90% of the company’s operating income. The company provides equity brokerage services in both cash and derivatives markets, along with mutual fund distribution, through its subsidiary, Groww Invest-Tech Private Limited.

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Market share and active users

Groww has solidified its position as a leader in the Indian stockbroking industry. According to data from the National Stock Exchange (NSE), as of August 2024, the platform had 1.2 crore active users and controlled 25% of the Indian market.

In October 2023, Groww surpassed Zerodha to become the largest stockbroking app in India. Other major competitors include AngelOne, Upstox, and ICICI Securities, all of which continue to vie for a share of the rapidly expanding market.

While Groww leads in terms of user base, Zerodha is still far ahead in financial performance. Zerodha reported Rs 8,320 crore in revenue and a net profit of Rs 4,700 crore for FY24, outpacing the VC-funded Groww.

Entry into margin trading facility (MTF)

Groww has recently entered the Margin Trading Facility (MTF) business, which allows investors to borrow funds to increase their market exposure. The move is expected to increase the company’s borrowings, which will be funded through a combination of internal resources and commercial paper.

However, according to ICRA, Groww’s financial leverage is expected to remain manageable despite the higher borrowing requirements.

While Groww’s growth trajectory has been remarkable, the company faces challenges ahead. The broking industry is likely to see a reduction in revenue in the coming financial year due to increased taxes on trading and possible restrictions on retail futures and options trading. Regulatory changes, including potential limits on futures and options trading, are expected to impact all major brokerage firms, including Groww and Zerodha.