Zerodha rival Groww turns profitable, revenue jumps 266% to Rs 1,277 crore in FY23

Groww Turns Profitable in FY23

Broking and financial services unicorn Groww on October 25th reported a profit after tax (PAT) of Rs 448 crore mainly on the back of its higher operating revenue which grew nearly 266 percent year-on-year to Rs 1,277 crore in the financial year ending March 2023, showed documents sourced from the Registrar of Companies (RoC).

Groww reported a loss of Rs 239 crore during the last financial year on account of a rise in its expenses. During FY23, Groww recorded a total expense of Rs 932 crore as against an expense of Rs 660 crore in FY22. Groww’s total income in FY23 was around Rs 1,427 crore.

“The benefits of the expenses that were spent during FY22 have started coming in for FY23 and there is significant growth in terms of activity and growth from other businesses as well,” said an industry expert closely tracking Groww.

Groww’s broking business standalone reported a profit of Rs 73 crore, compared with Rs 6.8 crore it had registered in the previous fiscal.

“The improving active client base from around 40 lakh early last year to 60 lakh this year has helped Groww to improve its financial metrics,” said credit rating agency ICRA in a note dated October 5th, 2023.

In FY23, the Bengaluru-based fintech diversified its offerings. In January 2022, Groww forayed into the lending business with loans for its users up to Rs 10 lakhs based on their credit scores. Similarly, the firm also rolled out the UPI payments feature on its broking app.

Founded in 2016 by former Flipkart executives Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww recently added Microsoft CEO Satya Nadella as an investor and advisor. In 2021, months after turning unicorn, Groww's valuation tripled to $3 billion across two funding rounds from investors like ICONIQ Growth, Ribbit Capital, and YC Continuity, among others.

Groww’s direct rival, Zerodha, reported a 39 percent growth in revenue at Rs 6,875 crore in FY23 compared with the previous financial year. It also reported an identical growth in profits, which stood at Rs 2,907 crore during the last fiscal.

Interestingly,  Groww surpassed Zerodha to become India's leading brokerage in terms of number of active investors as of September 2023.

According to NSE, Bengaluru-based Groww has 6.63 million active investors while Zerodha has 6.48 million at the end of September 2023. In March 2021, Zerodha had 3.4 million customers, whereas Groww had 0.78 million. However, Zerodha’s revenue is more than five times that of Groww.

Groww has witnessed substantial growth, going from approximately 0.78 million users in FY21 to 3.85 million in FY22 and 5.78 million investors in FY23.

This growth has also attracted formidable competitors, such as HDFC Bank, which launched the Sky discount broking app.

PhonePe is the latest fintech player to enter the stock broking business. The firm announced on 30 August its entry into the stock broking business with the launch of its app called "Share. Market".