Groww Q2 results preview: MOFSL sees 41% revenue growth; margins, derivatives business in focus

Billionbrains Garage Ventures, the parent company of Groww, is scheduled to announce its Q2FY27 results on Wednesday, October 14. The company is expected to report strong year-on-year growth in revenue and profitability, according to estimates from Motilal Oswal Financial Services (MOFSL). However, sequential revenue trends and margin pressures remain key monitorables for the brokerage.

MOFSL estimates revenue at Rs 1,434 crore for Q2FY27, up 40.8% from Rs 1,019 crore in the corresponding quarter last year. EBITDA is projected to rise 43.5% year-on-year to Rs 866 crore from Rs 603 crore, while adjusted net profit is estimated at Rs 651 crore, up 38% from Rs 471 crore.

Despite the expected year-on-year growth, the brokerage flagged potential pressure on sequential performance, particularly from the derivatives business.


“Derivative revenue to decline QoQ owing to CAS, while cash revenue to be largely flat and commodity to grow,” MOFSL said in its report.

The brokerage added that Groww's margin trading facility (MTF) book has reached a new peak, with the growth momentum expected to continue alongside an improvement in cash yields.

Margins, however, are likely to decline sequentially, driven by lower revenue and a slight increase in absolute costs, according to MOFSL. The financial performance of the wealth management business also remains a key monitorable as the company looks to offset the impact of pressure on broking revenue.

MOFSL has maintained a Buy rating on Billionbrains Garage Ventures, with a target price of Rs 240. The brokerage's stated current market price in the report was Rs 180, implying an upside of 33%.

Groww shares settled at Rs 192.61 apiece on the NSE in the market data provided, up 0.11% from the previous close of Rs 192.39. The stock traded in a range of Rs 190.79 to Rs 195.16 during the session. The stock has gained 24.24% so far this year, according to the data provided, outperforming the Nifty 50, which has declined nearly 14% over the same period.

At the latest closing price of Rs 192.61, MOFSL's target price of Rs 240 implies an upside of around 24.6%.

The brokerage has also cut its earnings per share estimates for FY27 and FY28 by 8% and 6.6%, respectively, highlighting the need to monitor the trajectory of broking revenue, margins and the contribution from wealth management.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here