By Sayan Sen

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Zero-commission brokerage Groww posted a softer first quarter as new market rules and defensive spending lowered trading activity. But as traders backed away, profit still rose as the Bengaluru-based fintech slashed bonuses, salaries, and marketing costs.

The IPO-bound the startup saw revenue from operations fall 9.6% year-on-year to Rs 904.39 crore in Q1, driven by a 17.5% decline in fees and commissions.

The drop reflects the immediate impact of sweeping regulatory changes from the Securities and Exchange Board of India (SEBI), including higher equity index derivatives lot sizes, reduced weekly expiries, and the implementation of “True-to-Label” pricing that caps pass-through fees which alone shaved 9% off from fees and comission income, according to management calculations.

The slowdown was evident in participation trends. Industry-wide, individual F&O activity fell 36.31%, and Groww mirrored that decline: Broking Transacting Users fell to 6.12 million from 7.24 million, while Derivatives Active Users slid to 1.40 million from 1.95 million.

Profit attributable to shareholders rose 11.9% to Rs 378 crore in Q1, up from Rs 338 crore a year earlier, even as revenue declined. The improvement came from tighter cost controls, with employee benefits expenses dropping 45% after last year’s quarter was inflated by a one-time long-term incentive of over Rs 150 crore.

Routine salaries and bonuses also shrank by more than half, while marketing and business-promotion costs were trimmed, bringing other expenses down 14.7%. Overall, total expenses fell 24.5%, more than offsetting the revenue decline.

However, EBITDA margin declined to 56.08% in Q1 FY25 from 58.32% in Q1 FY24.

Interestingly, on the payments side, Groww UPI processed 77.84% of deposit transactions in Q1 FY25 compared to 56.75% in Q1 FY24, and delivering higher transaction success rates than third‑party payment systems.
Quarterly swings aside, the broader trend remains upward. For the full fiscal year, revenue from operations rose 49.5% as the active user base scaled to 13.94 million from 9.43 million.

The FY25 P&L also benefitted from the absence of last year’s one-time management payouts worth Rs 778.6 crore, which drove employee benefits expense down by about 73.5%. “Long term employee benefits given to management has been cancelled” the company noted in its filing.

Those savings were partly recycled into growth, with other expenses up 41.9% on brand spend, cloud capacity, depository and payments charges, and higher credit-loss provisions tied to the expanding credit/MTF products.

The Y Combinator-backed fintech has emerged as the clear market leader, with more than 12 million accounts and a commanding 26.8% share of the brokerage market as of August 31.

Groww’s scale now puts it comfortably ahead of both Zerodha and Angel One, the long-established fintechheavyweights of the industry. Zerodha holds the second spot with 7.26 million accounts and a 16.1% share, while Angel One is close behind at 7.05 million accounts and 15.6%.

However its revenue lags behind its peers. For comparison, listed peer Angel One Ltd reported a 61% year-on-year decline in net profit at Rs 114.4 crore for the June 2025 quarter, compared to Rs 292.7 crore a year ago. Revenue dropped 19% YoY to Rs 1,140 crore from Rs 1,405 crore in Q1 FY25.

The difference gets starker when compared to Zerodha. While it did not reveal its FY25 figures, Zerodha posted a revenue of Rs 8,320 crore and a profit of Rs 4,700 crore, excluding an unrealised gain of Rs 1,000 crore.

In FY24, Groww reported revenue from operations of Rs 2,609 crore and a net loss of Rs 805 crore.

Meanwhile, Groww is betting on a flurry of new products—from automated trading APIs and wealth management tools for affluent clients to commodity derivatives and bonds—to squeeze more revenue from each user, leveraging its massive customer base to pull ahead of rivals.
(Edited by Megha Reddy)