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Zerodha, a leading stock broking platform, has achieved remarkable financial success in FY24. The company reported over ₹8,000 crore in revenue and more than ₹4,500 crore in profit. This marks a significant increase from the previous year’s ₹6,875 crore in revenue and ₹2,907 crore in profit. This impressive performance translates to a profit margin exceeding 50%.
Despite these achievements, Zerodha’s co-founder and CEO, Nithin Kamath, has cautioned about potential challenges ahead. The Securities and Exchange Board of India (SEBI) is set to implement new regulations that could impact Zerodha’s revenue model. Starting October 1, SEBI will eliminate the volume-based transaction fee model for free equity delivery trades. This change is expected to cause a 10% dip in Zerodha’s revenue. Additionally, changes in regulations around index derivatives could lead to a 30% to 50% drop in revenue.
Kamath also mentioned that the company’s annual maintenance charges (AMC) will be affected by new thresholds set by SEBI. The threshold for charging the full AMC has been raised from ₹4 lakhs to ₹10 lakhs in demat holdings. This, along with the removal of the account opening fee, is expected to further reduce revenue.
Despite these upcoming challenges, Zerodha remains confident in its ability to navigate the slow period. The company attributes its resilience to a small, efficient team and careful spending. Zerodha employs 1,200 people, with only a small portion dedicated to the core business.
To mitigate the impact of these regulatory changes, Zerodha is diversifying its revenue streams. This includes launching Margin Trade Funding, public and private market investments, and Loan-Against-Securities services. Through its venture arm, Rainmatter, Zerodha has invested in over 120 companies and committed ₹1,000 crore to climate and environmental causes.
