Stock brokerage platform Zerodha’s revenue topped the $1 billion mark in FY24 with a profit margin of over 56%, making it India’s most profitable new-age tech company.
“FY23/24 was a fabulous year in terms of both revenues (Rs 8320 crore) and profitability (Rs 4,700 crore). The profits don’t consider the ~Rs 1000 crore of unrealised gain, which will show in our financials,” said Nithin Kamath, Co-founder and CEO of the company, in a blogpost on September 24.
Zerodha’s FY24 numbers reflect a significant jump from FY23, when Zerodha’s operational revenue was Rs 6,875 crore and profit after tax was Rs 2,907 crore. The company’s net worth is now nearly 40% of the total customer funds it manages.
However, Kamath anticipates a drop in revenue and profit in the current fiscal, thanks to a new circular issued by SEBI in July this year that mandates market infrastructure institutions to charge uniform fees to all members starting October 1.
Kamath said he expects a 10% dip in revenue for Zerodha in the current fiscal year due to SEBI’s true-to-label circular.
He also said the company anticipates a 30% to 50% drop in revenue due to regulation around index derivatives.
“SEBI recently published a consultation paper on index derivatives that was open to public comments. We expect this paper to materialise into regulation sometime in the next quarter. Index derivatives today are a significant portion of our revenue, and any change will impact us. We anticipate a 30% to 50% drop in revenue,” said the company in the blog post.
The company is also grappling with increased competition in a saturated market, trying to balance product complexity for both seasoned traders and first-time investors.
“Regulation will reduce business, markets could go down, and competition will increase. A perfect storm for us,” it said.
To mitigate these risks, Zerodha is diversifying its revenue streams. This includes the launch of Margin Trade Funding, public and private market investments, and Loan-Against-Securities services.
Through its venture arm Rainmatter, the company has invested in over 120 companies, with an allocation of Rs 680 crore. It is partnering with startups in sectors such as fintech, climate, health, and sports. It has also
committed ₹1,000 crore to climate and environmental causes via Rainmatter Foundation.
Despite the upcoming challenges, Zerodha says it is committed to long-term, customer-focused growth and does not want to rush into public listing.
