Zerodha is already one of India’s most profitable tech companies, but it seems to keep bettering its own records each year.
Zerodha has reported a profit of Rs. 4,700 crore in FY24. This is 62 percent more than the profit of Rs. 2,907 crore the company had reported in FY23. This is also the highest profit ever reported by an Indian internet startup.
“We are in the midst of excess. As they say, it’s good to be in the pick-and-shovel business when everybody is digging for gold,” Zerodha CEO Nithin Kamath wrote in a blogpost. “The profits don’t consider the ~Rs 1000 crore of unrealised gain, which will show in our financials. Given the profitability of the last three years, our networth is almost ~40% of the customer funds that we manage. It makes us one of the safest brokers to trade with,” he addded.
Zerodha has been profitable since its inception, but its profits have been on a tear over the last few years. In FY20, Zerodha had reported a profit of Rs. 442 crore, which rose nearly 3x to Rs. 1,122 crore in FY21. From there, Zerodha nearly doubled its profit to Rs. 2,094 crore in FY22, which rose around 50 percent to Rs. 2,907 crore in FY23. Zerodha has now grown its profit to Rs. 4,700 crore in FY24. In essence, Zerodha’s profits have risen 10x in the last 4 years.
| Financial Year | Profit (INR Crores) | Revenue (INR Crores) |
|---|---|---|
| FY20 | 442.3 | 1,034.7 |
| FY21 | 1,122.3 | 2,728.9 |
| FY22 | 2,094 | 4,964 |
| FY23 | 2,907 | 6,875 |
| FY24 | 4,700 | 8,370 |
These record numbers have come in even as Zerodha has lost its position as India’s biggest broker — Groww now has more clients than Zerodha, and Angel One is catching up. Zerodha, for its part, is now saying that it could see its profit and revenue numbers fall in the coming years. “There many risks were around the corner, and they all seem to be materialising simultaneously. We are already seeing revenue and profit plateau, and we are bracing for a big revenue hit later this year,” Kamath said. He added that upcoming restrictions on derivatives trading which would require higher margins, and newer regulations, such as disclosing all costs while placing an order, could hit its numbers. “We anticipate a 30% to 50% drop in revenue,” Kamath said.
But Kamath has now been saying this for several years. In 2021, he’d said that it was the “stupidest time” to raise money, given how markets would soon correct, and the stock broking business would simultaneously cool down. In April 2022, he’d said that he expected growth to slow down in the next 3-6 months, and had been similarly gloomy in FY23. But Zerodha for the moment seems to keep going from strength to strength, and after smashing its own record, has reported the highest ever profit for an Indian internet company