Zerodha’s total income increased 38% to INR 6,875 Cr in FY23 from INR 4,964 Cr in FY22
The stock broking platform’s net profit jumped 39% to INR 2,907 Cr from INR 2,094.3 Cr in FY22
In a blog post, CEO Nithin Kamath said growing interest in futures and options fuelled the growth in the startup’s revenue and profit
Nithin and Nikhil Kamath-led stock broking platform Zerodha’s total revenue crossed the INR 6,000 Cr mark in the financial year ended March 31, 2023. The bootstrapped unicorn reported a total income of INR 6,875 Cr during the financial year 2022-23 (FY23), an increase of 38% from INR 4,964 Cr in the previous fiscal year.
The Bengaluru-based startup generates revenue from brokerage sales, user onboarding collections, and sale of its premium tech products such as Kite Connect API.
On the back of the strong growth in business, Zerodha’s net profit jumped 39% to INR 2,907 Cr from INR 2,094.3 Cr in FY22.
In a blog post, Zerodha cofounder and CEO Nithin Kamath said, “There’s still phenomenal interest in the markets, especially in futures and options. This has been the primary reason for the increase in revenue and profitability over the last three years. 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.”
Nithin said while the trading activity in futures and options (F&O) has increased significantly, the total number of people trading F&O is still not that large. Around 45 Lakh unique Indians traded once a year in F&O in FY23.
“To set this in context, we have 12 Cr demat accounts (non-unique) in India, and NSE active client data indicates ~3 Cr 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,” he said.
Zerodha competes against the likes of Groww and Upstox, which are enabling millennials to enter the stock market with a user-friendly app interface with easy one-tap creation of a free demat account.
However, both Groww and Upstox are backed by VC firms and are in losses. While Groww, last valued at $3 Bn, incurred a net loss of INR 239 Cr in FY22 on an operating revenue of INR 351 Cr, Upstox posted a loss of INR 444.5 Cr on an operating revenue of INR 765.6 Cr, according to an Entrackr report.
Nithin claimed that Zerodha is the only broker in the country to charge an account opening fee of INR 200 and hinted that the company has no plans to change this.
Despite this, Zerodha continues to have more users than Groww and Upstox. In FY22, Zerodha had a user base of 6.6 Mn as against Groww’s 5 Mn and Upstox’s 4.1 Mn.
However, as per a recent report by ET, Groww is set to overtake Zerodha in terms of active clients this month.