10 months ago
Nuvama: Groww Less Affected by Reduced F&O Trading Than Rivals
Imagine some companies help people buy and sell stocks and other investments.
One company, called Groww, is the biggest in India based on how many people use it.
An expert group named Nuvama looked at Groww and said it probably won't be hurt as much if people trade less of something called F&O.
This is because Groww is making money from more than just F&O, like loans and managing money for people.
Also, Groww gets its customers directly, while other companies like Angel One sometimes use helpers and have to pay them.
Nuvama thinks Groww's technology and easy-to-use app also help it succeed.
Even if F&O trading goes down a little, Groww's overall money-making and profits should be less affected than some of its competitors.
Nuvama Institutional Equities projects Groww to be less impacted by a reduction in F&O trading compared to competitors like Zerodha and Angel One.
A 5% drop in F&O orders is estimated to reduce Groww's revenue by 2.5%, EBDAT by 4.8%, and adjusted profit by 4.4%.
Groww's strong activation rates and focus on technology and user interface contribute to its success and low customer acquisition cost.
Groww's diversification into lending, asset management, and insurance reduces its dependence on F&O revenue, which has decreased as a percentage of total broking revenue.
Groww leads in active clients with 1.19 crore, significantly more than Zerodha (71 lakh) and Angel One (69 lakh).
- Who
- Nuvama Institutional Equities
- What
- Analysis on Groww's resilience to reduced F&O trading compared to competitors
- Where
- India
- When
- Recent note, referencing FY24–Q1FY26 financials
- Why
- To assess the impact of potential changes in F&O trading on Indian retail brokers
Groww
Angel One
Impact of 5% drop in F&O orders
Groww
Revenue: -2.5%, EBDAT: -4.8%, Adjusted PAT: -4.4%
Angel One
Revenue: -2.3%, EBDAT: -10%, Adjusted PAT: -5.2%
Sensitivity of EBDAT margins to F&O trading changes
Groww
Marginal impact of 122 bps
Angel One
More sensitive, potential impact of 135 bps
F&O Revenue Contribution (FY24-Q1FY26)
Groww
Declined to 62% (from 90.2%)
Angel One
Declined to 74.5% (from 84.4%)
Client Acquisition Method
Groww
All clients acquired directly
Angel One
Clients acquired directly and via sub-brokers (incurring commission costs)
Key facts
- Groww's Active Clients (FY26TD)
- 1.19 crore
- Zerodha's Active Clients (FY26TD)
- 71 lakh
- Angel One's Active Clients (FY26TD)
- 69 lakh
- Groww's CAC per Active Client (FY25)
- Rs 1,441
- Groww's EBDAT Margin
- 59.7%
Quotes
Nuvama Institutional Equities
An institutional equities research firm
“We estimate that a 5 per cent drop in F&O orders on Q1FY26 financials shall drag Groww’s revenue, EBDAT, adjusted PAT by 2.5 per cent/4.8 per cent/4.4 per cent versus AngelOne’s 2.3 per cent/10 per cent, 5.2 per cent. We believe Angel One’s EBDAT margins shall be more sensitive and is likely to be hurt by 135 bps versus Groww at 122 bps.”
businesstoday.in
“We believe apart from competitive pricing, technology and user interface are key factors driving success. Besides broking, Groww has expanded into lending (MTF, LAS, personal loans), asset and wealth management, insurance distribution—businesses yet to scale up.”
businesstoday.in
