Billionbrains Garage Ventures, the parent company of the investment platform Groww, reported a 54% year-on-year increase in net profit to ₹725 crore for the September quarter. While revenue grew 44%, regulatory changes in derivatives trading have forced the company to increasingly rely on margin lending to drive income.
Billionbrains Garage Ventures Ltd, the company behind the investment platform Groww, reported a strong financial performance for the September 2026 quarter, with net profit climbing 54% year-on-year to reach ₹725 crore. Total revenue for the quarter also rose 44% to ₹1,541 crore compared to the same period last year.
Despite the strong annual growth, the company witnessed a minor sequential dip, with net profit and revenue declining by 1.4% and 0.5%, respectively, compared to the June quarter. This stagnation in growth reflects a shifting landscape in how the platform generates income, particularly as regulatory changes impact its core segments.
Impact of Regulatory Shifts on Revenue
Historically, equity derivatives have been a major revenue driver for the platform. However, this segment faced a 14.3% sequential decline in the September quarter. Management linked this performance directly to recent directives from the Securities and Exchange Board of India (SEBI) concerning the closing auction system. As this regulatory change pressures trading volumes, the share of equity derivatives in the company’s total income has contracted to 44.8%, down from 56.9% a year ago.
To compensate for the softening demand in derivatives, the platform has pivoted toward credit-led growth. The company’s margin trading facility (MTF) book has expanded significantly, reaching ₹4,351 crore from ₹1,668 crore a year earlier. While this expansion helps diversify revenue streams, it introduces new risks to the balance sheet. Recognizing this, the company has tightened its underwriting standards, selectively excluding volatile stocks from its lending list and requiring higher collateral for others. In some cases, the platform now limits financing to 20% of a stock's value to protect against sudden market downturns.
Rising Operating Costs
Operational expenses for the quarter rose by 29% to ₹556 crore. These costs were primarily driven by increased investments in artificial intelligence, higher computing power requirements to handle trading volumes, and a one-time charge of ₹13 crore related to client reimbursements following an operational failure at a third-party market infrastructure institution.
Despite the regulatory and cost pressures, customer adoption remains steady, with 11 lakh new transacting users added during the quarter. Total assets under management across the platform grew 46% to reach ₹3.9 lakh crore. Moving forward, the key monitorables for investors will be the sustainability of the margin trading book amid market volatility, the company's ability to navigate the evolving regulatory environment for retail derivatives, and the effectiveness of its cost-control measures as it invests in new technology and potential international expansion.