Indian discount brokerage Groww‘s quarterly profit more than doubled, as Middle East war–driven market volatility boosted trading activity in derivatives and commodities, the company said on Monday, while warning that prolonged market weakness carries risks for the brokerage’s growth.
The Tiger Global-backed firm’s consolidated net profit stood at 6.86 billion rupees ($73.73 million) for the quarter ended March 31, up from 3.1 billion rupees a year ago.
If the market remains weak for a longer period of time due to persistent selling by foreign investors, it could hurt sentiment, slow new user addition and asset inflows, the company said.
The number of Groww‘s transacting users rose to 16.7 million during the quarter, up 20% from last year and 4.7% sequentially. Total customer assets, however, declined 1.1% from the previous quarter.
In February, analysts had warned that tighter central bank lending and collateral norms could pressure brokerage funding and prompt operators to raise capital. Along with higher transaction taxes, the measures were seen as likely to curb derivatives trading activity.
There was little indication of that, though, in the numbers for the equity derivatives segment that were reported Monday, which included a 43.1% rise in average orders per user from last year, accounting for 55% of Groww‘s total income.
Groww, which was founded almost a decade ago, is the country’s largest online investment platform by active users and has onboarded more than 50 million customers, according to its website.
The firm reported an 88% rise in revenue from operations to 15.05 billion rupees, while expenses stood at 1.2 billion rupees.
Last week, peer Angel One’s profit surged 83%, driven by stronger client trading activity and higher order volumes. Early April data showing stable client engagement led Citi analysts to expect the momentum to be sustained.
Reuters
