Bengaluru-based wealth-tech platform Groww is steadily rebalancing its revenue engine, moving away from heavy dependence on futures and options trading as newer products begin to contribute meaningfully to growth. In the December quarter (Q3 FY26), derivatives accounted for 53 percent of Groww’s revenue, down sharply from 63 percent in the same period last year, even as overall operating income expanded.

Over the past two years, derivatives trading has emerged as a dominant revenue driver for retail brokerages in India, helped by rising retail participation and high transaction volumes. However, this dependence has also drawn regulatory and policy concern. The Securities and Exchange Board of India tightened norms around F&O trading in late 2024, citing that nearly 90 percent of retail derivatives traders were incurring losses. Against this backdrop, platforms with diversified income streams are increasingly seen as better positioned for regulatory resilience.

Groww’s latest financials highlight a deliberate pivot. While the company’s operational revenue rose 26 percent year-on-year to ₹1,261 crore in Q3 FY26, the share of derivatives in total income declined. At the same time, Groww’s market share in equity derivatives contracts rose to 18.1 percent from 12.2 percent a year earlier, indicating that higher volumes are being driven by a smaller but more active user base.

This is reflected in user metrics. Active derivative traders fell to 1.48 million during the quarter, from 1.77 million a year ago and 1.94 million in the previous quarter. Yet engagement deepened, with daily premium turnover climbing about 46 percent quarter-on-quarter and average order values in derivatives rising 9 percent sequentially.

The headline shift is not just about derivatives shrinking as a percentage of revenue, but about what is replacing them. New verticals—including commodity derivatives, loans against securities, margin trading facilities (MTF), and wealth management—accounted for nearly 49 percent of the incremental income growth during the quarter.

Commodity trading, launched only three months ago, crossed 2.5 lakh active traders and contributed roughly 4 percent of Q3 income. Groww’s in-house NBFC, Groww CreditServ, saw its loan book expand 7 percent sequentially to ₹1,390 crore, with loans against securities more than doubling during the quarter. Most notably, the margin trading facility book surged fourfold year-on-year to ₹2,307 crore, compared with ₹542 crore in the year-ago period.

This diversification reduces regulatory risk while improving revenue stability, especially in periods of lower market volatility when derivatives activity can cool sharply.

Brokerages have taken note of this evolving mix. Motilal Oswal raised its FY27 and FY28 EPS estimates for Groww by 2 percent each, citing strong expansion in the MTF book and a better-than-expected rollout of the commodities segment. Global brokerages Citi and Jefferies also highlighted that newer verticals accounted for 12 percent of Groww’s revenue in the December quarter, up from just 1 percent a year earlier.

For the Indian broking and fintech space, Groww’s numbers underline a broader shift. Growth is increasingly coming from cross-selling and deeper wallet share rather than sheer onboarding of first-time traders. More than 8 million customers, or about half of Groww’s active user base, now use more than one product on the platform.

However, diversification has not insulated profitability in the near term. Groww reported a 28 percent year-on-year decline in net profit to ₹547 crore in Q3, largely due to a one-time post-tax gain of ₹315 crore recorded in the base period last year. Adjusted for this, operating profit after tax grew 24 percent, in line with revenue and EBITDA growth.