Zerodha to see 30-40% revenue drop next year, says Nithin Kamath
Speaking at TechSparks 2024, Nithin Kamath predicted a 30-40% dip in revenue next year due to various regulations including SEBI's "true to label" circular and rules around index derivatives.
Stock brokerage platform is set to see a 30-40% drop in revenue next year, said Nithin Kamath, Founder and CEO of Zerodha and Rainmatter, at YourStory's flagship startup-tech event, TechSparks 2024.
Kamath said the anticipated drop in revenue and profit was due to "all the regulations", including a SEBI circular issued in July this year that mandates market infrastructure institutions to charge uniform fees to all members starting October 1, as welL as regulation around index derivatives.
Discussing what revenue and profits mean to him in a fireside chat with YourStory Founder and CEO Shradha Sharma, Kamath said, “Numbers don't really mean anything. One of the reasons why we are not listing, is when you list, it starts meaning something. We are lucky to be where we are without raising capital and we want to continue the same way.”
Kamath adds that he doesn’t look at revenue on a daily or monthly basis either.
“Once revenue and profits start bothering you, you will do whatever you can to make sure it stays up,” he added.
“As Zerodha we have peaked, not just us, the brokering industry has peaked. We are building other adjacent bits to it,” Kamath added.
The company is now building a loan against securities—Zerodha Capital; insurance business with Ditto, an advisory-first insurance distribution platform; and is also collaborating with Smallcase to launch an asset management company (AMC) in India.
Zerodha is also working on diversifying its revenue streams, including the launch of Margin Trade Funding, public and private market investments, and Loan-Against-Securities services.
Kamath had earlier shared on a blog post on Tuesday that the company had clocked a revenue of Rs 8,320 crore and a profit of Rs 4,700 crore, excluding an unrealised gain of Rs 1,000 crore.
In FY23, Zerodha's operational revenue was Rs 6,875 crore with a profit after tax of Rs 2,907 crore.
Edited by Jyoti Narayan