Zerodha reports Rs 6,875 Cr revenue in FY23, net profit up by 38.8%

Online stock broking platform Zerodha reported a 38.5% jump in its revenue to Rs 6,875 crore in FY23. Its profit after tax stood at Rs 2,907 crore. 

The company registered a rise of 38.8% in net profits—up from Rs 2,094 crore earned in the previous fiscal. 

“We continued to see phenomenal growth even in FY 22/23. That said, the business has plateaued in terms of revenue and profitability this financial year until now,” Co-founder and CEO Nithin Kamath wrote in the company’s blog post. 

Zerodha'a bulk revenue was driven by futures and options traders. As per the NSE data (August), Zerodha had around 6.3 million active clients.

Sharing numbers, Kamath said, “We have 12 crore demat accounts (non-unique) in India, and NSE active client data indicates three crore Indians who traded once a year (unique) on the exchange. So approximately 3% of everyone with a demat account and 15% who traded the market, traded in F&O last year. However, this subset of users would have contributed to the majority of revenues for all brokerage firms and even the exchanges.”

With Zerodha’s major revenue coming in from F&O trading, the CEO also cautioned of excessive reliance on the same saying any regulation or change in market conditions or newer competitors with better products could reduce its retail trading activity in F&O and consequently hit the revenue. 

However, Kamath highlighted Zerodha’s overall assets under management of Rs 3 lakh crore, which puts it in a comfortable position and “ahead of the competition”. 

“Given our net worth, frugal operations, customer trust, and agility as a business, we are well placed to pivot whenever required," he added. 

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Finfluencer affiliation  

While supporting SEBI's (Securities and Exchange Board of India) consultation paper on restricting brokers from associating with finfluencers—financial influencers—acting like advisors or analysts, Kamath said a regulation around this could also impact Zerodha’s referral and partner programme. 

Almost 10% of the new business for Zerodha comes from these programmes.

The company shared updates on Zerodha's asset management company (AMC), under the name Zerodha Fund House, in partnership with smallcase. The passive-only AMC has received final approval from the SEBI and should be live with its two funds in the next couple of weeks.