Groww shares gain after quarterly profit surges on higher trading activity

Groww parent Billionbrains Garage Ventures reported that its consolidated net profit nearly doubled in the first quarter, driven by strong growth in transacting users and higher trading activity across its investment platform.

The results also lifted investor sentiment, with the company's shares rising during trading.

The company posted a consolidated net profit of 7.35 billion rupees ($76.5 million) for the quarter ended June 30, compared with 3.78 billion rupees in the corresponding period a year earlier.

Shares of the company initially climbed nearly 8% following the earnings announcement.

At the time of writing, the stock was trading 4.1% higher at 212.22 rupees.

User growth drives quarterly performance

The online brokerage said the number of transacting users increased to 22 million during the quarter.

That represented a 24% year-on-year increase and a 4% sequential rise, highlighting continued customer engagement on the platform.

According to the company's website, Groww, which was founded almost a decade ago, is India's largest online investment platform by active users, serving more than 50 million customers.

The company also reported continued expansion in customer holdings.

Total customer assets increased 38% from a year earlier and 22% sequentially, reflecting sustained growth in assets managed through the platform.

Market share expands despite industry decline

Groww said it continued to gain market share during the quarter despite weakness across the broader brokerage industry.

The company added 115,000 active National Stock Exchange clients during the reporting period.

In contrast, the overall industry recorded a net decline of 257,000 clients, according to the company.

The brokerage also pointed to stronger performance in its commodities derivatives business, which contributed to the quarter's results.

According to the company, the number of active users in the commodities derivatives segment increased 10.7% sequentially to 435,000 during the quarter.

The company said the higher contribution from this business supported overall financial performance.

Revenue outpaces expense growth

Revenue from operations rose 66% year-on-year to 15.01 billion rupees, reflecting increased trading activity and platform growth.

At the same time, expenses increased 25%, a slower pace than revenue growth, supporting the sharp rise in quarterly profit.

The quarterly results indicate that Groww continued to expand its user base and customer assets while strengthening its position in India's online brokerage market.

The company's ability to add active exchange clients even as the broader industry experienced a net decline also highlighted its relative market strength during the quarter.

Investor sentiment remained positive following the earnings announcement, with the stock maintaining gains in afternoon trading after an initial surge.

The results were supported by continued customer growth, higher revenue from operations, and increased participation in the commodities derivatives business, according to the company.