Zerodha fails to cross Rs 10,000 crore revenue mark in FY25; net profit falls 23% to Rs 4,237 crore

Zerodha, the Kamath brothers-led stockbroking firm, reported a decline in both revenue and profit for the fiscal year ended March 2025 (FY25) as regulatory pressure, lower trading activity and a drop in active users weighed on performance. 

The Groww rival posted a 11.2% fall in revenue to Rs 8,868.2 crore from Rs 9,994.5 crore a year earlier. Net profit declined 23% to Rs 4,236.7 crore, according to data from market intelligence platform Tracxn.

In a blog post published in September, founder Nithin Kamath had already warned of a sharp slowdown. He noted that brokerage revenue had dropped 40% in the first quarter of FY26, citing market and regulatory headwinds.

The Securities and Exchange Board of India (SEBI) introduced steps last year to reduce excessive speculation in the futures and options market after rising retail losses. The changes created concern about further restrictions, including talk around a possible ban on weekly options. SEBI chairperson Tuhin Kanta Pandey later clarified that no such decision had been taken.

Zerodha’s cost base increased through the year. Total expenditure rose to Rs 3,238.4 crore from Rs 3,119.3 crore, driven by higher operating and employee expenses.

The platform also saw its active user base shrink. NSE data shows that active clients dropped to 7 million in October from 7.95 million in February. Groww, which listed earlier this month, remained ahead with 12 million active users. 

For the quarter ended September, Groww reported a 12% rise in net profit to Rs 471.33 crore even as revenue declined 9.5% to Rs 1,018.7 crore.

Zerodha continues to hold 15.8% market share with 7.26 million users, but brokerage income remains its main source of earnings. Investment management fees, software services and interest income also contribute to operating revenue.

Employee costs rose sharply during the year. Salary expenses increased 31% to Rs 539 crore. Directors Nithin Kamath, Nikhil Kamath and Seema Patil together withdrew Rs 228 crore in remuneration. Nithin and Nikhil received Rs 96 crore each, while Seema received Rs 36 crore.

Other major expenses included Rs 2,328 crore on fees and commissions, Rs 96 crore on professional and technical services, and Rs 47 crore on advertising. 

It's worth noting that Zerodha continues to hold one of the strongest balance sheets in the industry. The company reported cash and bank balances of Rs 22,769 crore, while total current assets stood at Rs 35,719 crore.