Zerodha Faces Earnings Challenge After Record FY24

Zerodha, known as India’s leading stockbroker, is encountering its first significant earnings hurdle after an impressive FY24. The founder, Nithin Kamath, disclosed that brokerage revenues in June 2025 plummeted by nearly 40% compared to the previous year, driven by regulatory adjustments and a decline in market engagement that impacted the firm’s primary operations.

Financial Performance Overview

According to a graph shared in the blog entry, the company experienced a 10-15% dip in revenue and profits during FY25. However, the exact figures for FY25 have not been publicly shared by the firm. This decline follows FY24, during which Zerodha recorded Rs 8,370 crore in revenue and profits exceeding Rs 4,700 crore, yielding margins of 55%. In FY23, revenue was Rs 6,875 crore, accompanied by profits of Rs 2,907 crore, demonstrating the remarkable growth path the company had sustained over the past three years.

Contributing Factors to the Decline

Kamath highlighted that the downturn in June signifies the realisation of risks he had previously mentioned, such as increased STT on options, the reduction in weekly expiries, elimination of exchange transaction charge rebates, and the rise in BSDA limits. Coupled with a slowdown in retail trading activity, these transformations are significantly affecting earnings. He remarked that these risks have materialised.

Comparison with Previous Performance

In contrast, FY24’s results were bolstered by a surge in retail options volumes and enhanced operational efficiency. The company boasts a net worth exceeding Rs 13,000 crore with no debt, and more than half of the client funds are matched by its net worth.

Expansion Efforts at Zerodha

Zerodha is also broadening its non-broking activities. The Margin Trading Facility (MTF) has reached a book size of Rs 5,000 crore and holds a 5% market share, while customer assets on the platform comprise 10% of India’s retail and HNI AUM.

Market Position

In terms of the active user base in the Indian stock market, Groww maintains its leadership in the stock-broking sector with 12.07 million active clients. Zerodha remains second as of August with 7.26 million clients and commands a 15.8% market share.