Zerodha: Zerodha clocked Rs 4,700 crore in profits for FY24; expect new F&O rules to dent revenue by 30-50%: Nithin Kamath

Stock broking platform Zerodha has crossed Rs 8,370 crore in revenue and around Rs 4,700 crore in profits in FY24, said cofounder and chief executive Nithin Kamath in a blog post on Tuesday. While the business has shown strong growth over the last few years, Kamath reiterated that Sebi’s regulatory changes will adversely impact the company’s top line. Sebi’s ‘true to label’ circular will result in a 10% drop in revenues and its new rules around index derivatives will create a 30% to 50% drop in revenues for the company.

Zerodha is yet to file its financials with the registrar of companies (RoC), but Kamath said that growth had been steady in the last fiscal. In FY23, the company reported overall revenue of around Rs 6,875 crore and a net profit of Rs 2,900 crore.

In an interview with ET in April last year, Kamath had cautioned about a 30-40% revenue decline for FY24.

However, Zerodha has seen a slowdown in terms of business due to severe competition from the likes of Groww and Angel One. Its share of active clients on BSE has dropped to 16% in June 2024, compared to 17% in March 2023 and 19% in March 2022. From the peak of around 4 lakh accounts being opened monthly two years ago, Zerodha is now opening shy of 3 lakh accounts per month.

Additionally, Zerodha has withdrawn the account opening charges which it used to levy on its users, responding to competition in the market, which will also convert into a significant revenue drop for the company, Kamath commented.

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On the stock broking major’s much-discussed public listing, Kamath said that given the company is profitable and there is no pressing need to raise fresh funds, he would prefer to remain private.He pointed out that the business has diversified through the Rainmatter fund, where the group owns stakes in around 120 companies and has already invested Rs 680 crore. Zerodha also backs the Rainmatter Foundation, which is a not-for-profit vehicle with a commitment of around Rs 1,000 crore.

Zerodha runs a small credit business which has facilitated loans against shares worth around Rs 300 crore, along with backing Zerodha Fund House, an asset management company with an AUM of around Rs 3,000 crore.