Groww’s margins near 60% as new businesses drive diversification; Three segments that will drive the next phase of growth: Ishan Bansal

Groww posted strong revenue growth and sharp margin expansion last quarter, with operating margins reaching nearly 60%, thanks to its predominantly fixed-cost model, said Ishan Bansal, co-founder and CFO of Groww, in an interview with ET Now.

90% of the costs are fixed: turnover growth flows directly to the operating result

Bansal explained that roughly 90% of Groww’s cost base is fixed, meaning the additional revenue can translate almost immediately into profit.

• Service costs remained the same or even lower,
• Personnel costs have fallen slightly,
• The cost to grow (marketing) increased as customer acquisition increased.

This combination enabled the company to meaningfully expand margins without proportionate cost additions.

MTF, asset management and raw materials: Groww’s new sources of income

Groww is steadily reducing its dependence on F&O – which still accounts for 57% of revenue – by scaling new verticals:

Margin Trade Financing (MTF) now contributes 4 to 5% of sales; the book is growing at ₹400-600 crore per quarter.
Asset management (acquisition of Fisdom): It is expected to contribute 3% initially and scale up rapidly from 2025.
Commodity trading: Recently launched and ready to add additional revenue.

“Our core business minus derivatives is still growing rapidly… market share gains are helping us outperform industry growth,” Bansal said.

Asset management is growing faster than the core activities

Groww has three lakh affluent users who are eligible for wealth offerings. The plan is to convert 10-20% of that into:

• Regular investment fund advice,
• PMS and AIF products,
• Unlisted securities,
• Insurance related solutions.

“This year is all about integration. From next year, asset management should grow twice as fast as the rest of the business,” Bansal said.

The MTF market share could reach double digits

The Indian MTF market is around ₹1 lakh crore, and Groww currently has a 1.5-1.6% share. With cash market volumes soaring, Bansal believes Groww can eventually capture double-digit market share, depending on market conditions.

F&O sales are hit by regulations, but market share gains continue

Derivatives revenues have slowed from last year due to increased regulation, but Bansal expects steady improvement as underpenetrated users migrate from equities to derivatives.

Customer acquisition costs are rising, but could cool off

The CAC currently stands at ₹1,300–1,400 per customer, compared to ₹900 last year. The payback periods have been extended from 4 months to 6 months.

However, he expects the CAC to drop if:

• NSE active users increase,
• Market sentiment is improving,
• Organic growth is accelerating.

Groww aims for revenue growth of 20-30% in the long term

In the long term, Groww aims for annual revenue growth of 20 to 30%, supported by strong cross-selling within the product offering, margin gains through fixed costs and higher revenues through asset advice and PMS.Groww’s MF platform remains commission-free. Monetization will come from:

• Advice-based regular investment funds,
• PMS/AIF products via Fisdom,
• Fee-based wealth services.