India’s largest stock broking platform Zerodha saw slower growth in its bottomline as well as its topline for the financial year that ended March 2023 as compared to its tremendous growth in the previous two fiscals.
The Bengaluru-based bootstrapped company had seen two impressive financials in FY22 and FY21, wherein its revenue increased by 82% and 191%, respectively. Similarly, its net profit grew by 87% and 165% in these two fiscals.
Its impressive performance in these two fiscals came on the back of a rising number of new investors joining the stock broking platform in the hope of making the most out of a stock market reviving from pandemic-driven freefall.
Despite slower growth than the past two fiscals, Zerodha saw its net profit surge by 39% in FY23 to Rs 2,900 crore from Rs 2,094 crore in the fiscal before, it said in a blog.
Its revenue, on the other hand, grew 35.5% to Rs 6,875 crore in FY23 from Rs 4,694 crore year-on-year. The major sources of its income are stock brokerages, onboarding fees, commissions from selling mutual funds via Zerodha Coin and sale of APIs.
Founded by Nithin and Nikhil Kamath in 2010, Zerodha is currently a market leader in terms of total number of active traders. It pits against the likes of venture capital-funded platforms like Groww and listed platforms like Angel One, as well as several large-owned trading platforms and traditional brokerages like ICICI Direct, Sharekhan, and Motilal Oswal, among others.
Zerodha’s founder and chief executive officer Nikhil Kamath addressed the slowness in the company’s growth. He said that while it continued to see phenomenal growth even in FY23, it has seen a small dip in customer ratings since May 2023 due to accounts being deactivated by exchanges and depositories because of PAN not being mapped with the Aadhaar number.
“That said, the business has plateaued in terms of revenue and profitability this financial year until now,” he added.
However, he is still bullish about trading segments like futures and options. “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,” he added.