Zerodha hits $1 billion in revenue with a 55% profit margin in FY24.

Stockbroking platform Zerodha has achieved a significant milestone by reaching over $1 billion in revenue with an impressive 55% profit margin in the financial year 2024. 

The company’s co-founder and CEO, Nithin Kamath shared this achievement attributing to the company's strong performance and strategic business decisions.

He tweeted, “For years now, I'd been talking about regulatory risk in running a brokerage, and this was the year when all the risks materialized at the same time. We had plenty of positives.”

Further elaborating on financials he mentioned, “Rs 4700 crore of profits. Our networth is over 40% of customer funds, which makes us among the safest brokers, not just in India but in the world.”

A few highlights from FY2023/24 @zerodhonline

For years now, I'd been talking about regulatory risk in running a brokerage, and this was the year when all the risks materialized at the same time.

We had plenty of positives.

Content
Today, we have some of the best content on…

— Nithin Kamath (@Nithin0dha) September 25, 2024

Kamath also shared a link to his blog post sharing details about his company’s success.

Revenue and Profit Growth

In a recent blog post, Nithin Kamath revealed that Zerodha has reported more than Rs 8,370 crore in revenue and Rs 4,700 crore in profit for the fiscal year 2024. This marks a significant increase from the previous year, where the operational revenue was Rs 6,875 crore, and profit after tax stood at Rs 2,907 crore. These numbers indicate a remarkable growth trajectory for the company.

Projected Revenue Decline

Despite the impressive financial results, however, Zerodha is anticipating a substantial revenue decline later this year. The company has attributed this projected decline to upcoming regulations from the Securities and Exchange Board of India (SEBI), which will impact the revenue model for free equity delivery trades.

Kamath expects a 10% revenue dip due to the regulation, with a potential 30% to 50% drop in revenue from index derivatives.

How they managed to achieve such significant revenue and profit growth in FY24?

Zerodha's success can be attributed to several key factors:

1. Profitability: Kamath highlighted that more than half of the company's revenue has translated into profit. This indicates the company's ability to generate sustainable profits and manage its finances effectively.

2. Strategic Planning: The company's strategic planning and decision-making have played a crucial role in driving revenue growth. Zerodha has consistently focused on optimizing its business model and offerings to meet the evolving needs of its customers.

3. Regulatory Compliance: Despite the challenges posed by upcoming regulations, Zerodha has remained compliant and proactive in adapting to the changing regulatory environment. This has enabled the company to navigate potential revenue impacts effectively.

4. Financial Stability: Zerodha's strong financial position, demonstrated by its net worth being ~40% of the customer funds it manages, has given it a competitive edge in the market. This financial stability has instilled confidence in customers and investors alike.

5. Diversification: The company's recent forays into passively managed mutual funds and other investment products have provided additional revenue streams and growth opportunities. Zerodha's diversification strategy has contributed to its overall revenue and profit growth.

Despite the projected revenue decline due to regulatory changes, Zerodha remains confident in its ability to weather the storm and continue its growth trajectory.

As the company navigates the evolving landscape of the stock broking industry, it remains to be seen how Zerodha adapts and innovates to maintain its position as a market leader.

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