‘90% Fixed Costs’: Groww Co-Founder Harsh Jain Explains Rising Margins After Q2 Profit Jumps 25%
Addressing concerns over a reported dip in active clients, Jain said, the drop in active users is data from exchanges which is in lag.
Groww’s parent Billionbrains Garage Ventures Ltd. reported a 24.6% rise in profit to Rs 471 crore for the September quarter, driven by strong revenue growth and operational efficiency.
In an exclusive conversation with NDTV Profit, Harsh Jain, Co-Founder and COO of Groww, addressed queries on margins, restructuring, and active user trends. Jain clarified that the Rs 160 crore management incentive reversal seen in filings relates to adjustments made in previous years during a major restructuring.
“Last year we restructured to become an Indian company from a US entity. That involved two fronts, tax payments, which led to losses in 2024, and ESOP adjustments since promoters cannot hold ESOPs in India. Those one-offs are behind us. The numbers now reflect actual operational performance,” Jain said.
On profitability, Jain emphasised Groww’s tech-driven cost structure. “Overall we operate like a tech company so 90% of our cost is fixed cost, which includes cost to grow, cost serve, cost to operate, all these three things are pretty much fixed, almost 10-12% is variable cost, so whenever we will see the growth that will keep on happening due to new customers and new products being launched, the revenue goes up and the cost does not go up so the margin will always keep on improving,” he explained.
Addressing concerns over a reported dip in active clients, Jain said the drop in active users is data from exchanges, which is lagging.
Groww's parent company Billionbrains Garage profit rose 24.6% to Rs 471 crore in the second quarter of this financial year. This is in comparison to profit of Rs 378 crore in the previous quarter of this fiscal. Meanwhile, Groww's total income rose 13% in the quarter ended September to Rs 1,071 crore in comparison to Rs 948 crore in the previous quarter.
Revenue advanced by 12.7% quarter-on-quarter for the three months ended September, reaching Rs 1,019 crore. The advance in the revenue was on the back of active users and activity by the existing customers. The company's active users rose 3.2% quarter-on-quarter, led by growth in new user acquisition.
