Zerodha is expecting a major revenue dip soon, Nithin Kamath shares

He noted, “We are already seeing revenue and profit plateau, and we are bracing for a big revenue hit later this year. Sebi’s true-to-label circular will go live on October 1, 2024. We expect a 10% revenue dip”.

Moreover, another regulation on index derivatives could lead to a 30% to 50% reduction  in earnings, he said, adding, “Index derivatives today are a significant portion of our revenue, and any change will impact us.”

Nithin Kamath also highlighted changes to the Annual Maintenance Charges (AMC) under the new Basic Services Demat Account (BSDA) thresholds and said, “We can charge full AMC from customers with a demat holding of ₹10 lakhs and more, as opposed to ₹4 lakhs today. Combined with us removing the account opening fee, this would be a meaningful drop in revenue.”

Zerodha’s referral program has also taken a hit due to new guidelines from stock exchanges restricting payouts to only registered Authorised Persons, he said as the change has reduced the number of referrers from thousands to only a few registered partners.

Despite all this, Zerodha is at a strong position in the market although there is a tough road ahead for the company due to regulatory shifts, Nithin Kamath acknowledged.