The stable range of the gas engine compressors is reduced due to per stage maximum loading. The performance of the engine is closely associated with stable operating conditions. The instabilities of the flow occur if some rapid changes happen in the operating conditions and it leads to a rotating stall. To avoid such conditions, the proper stall margin should be maintained for the performance of the axial flow compressor. The stall margin can be enhanced by the blade tip and casing treatment. The casing treatment is commonly used to increase the stall margin of the axial compressor. The present numerical study investigated the performance of casing grooves on NASA rotor 37 by discretizing 3D RANS equations with the help of the finite volume method. One passage steady simulation is carried out for validation. The simulation results agree well with the experimental data for total pressure ratio and efficiency. The stall is predicted according to convergence criteria. The rectangular grooves model has been proposed and tested numerically. The performance of rectangular grooves and smooth wall casing is evaluated. The stall margin of the rectangular grooves model is increased by 6.37％as compared to the smooth casing. TLV is minimized with the help of the installation of grooves that reduced the vortex stagnation zone and supports to improve the stall. The stall margin of the axial compressor with casing grooves is remarkably enhanced but efficiency is slightly reduced.