India’s biggest retail broking player, Zerodha declares insane FY23 profits

Zerodha, India’s largest retail brokerage company, recently announced its FY23 profits and revenue increases which push the company’s success to new heights.

Zerodha declares insane FY23 profits

Zerodha's story

Also Read: Top 5 Mobile Trading Apps in India

Established on the 15th of August, 2010, and based in Bengaluru, Zerodha is India’s biggest stock broker when it comes to active retail clients. As of August 2023, the company announced an active client base of around 64 lakhs. 

On September 26, they reported significant revenue growth of 38.5 per cent for the financial year 2023. Their profit growth was also quite high at 39 percent. 

Highlights

  • Zerodha, India’s biggest retail brokerage company, boasts an active client base of around 64 lakhs.

  • Zerodha founder and CEO Nithin Kamath is a member of the SEBI Secondary Market Advisory Committee (SMAC) and the Market Data Advisory Committee (MDAC).

  • Zerodha’s revenue increased to Rs 6,875 crore in FY23 compared to Rs 4,964 crore in FY22 while profits surged to Rs 2,907 crore in FY23 from Rs 2,094 crore in FY22.

  • With a stagnating client base since last year, it’s hard to predict if the ace stockbroker could keep up with the momentum.

The Stock Market Boom and Zerodha

Zerodha, a digital stock trading platform founded in 2010, was made with the aim of removing hurdles traders face in the Dalal Street. The company today is registered with the Securities & Exchange Board of India (SEBI) and is also a member of NSE,BSE and MCX-SX.

With their recent impressive profit postings, CEO Nitin Kamath took to a blog post to reveal Zerodha's success strategy. He said there that over 45 lakh Indians were involved in trading in futures and options at least once in the previous year. 

NSE active client data showcases that 3 crore Indians traded once a year in exchange. This indicates that 3 per cent of Demat account holders and 15 per cent of traders engaged in F&O last year, counting towards a big portion of revenues earned by brokerage firms.

However, he also spoke of the projected stagnation of the population's interest in the stock market, resulting in a lowered client base over the past 18 months and a "plateauing" in revenue growth.

Zerodha’s Answer to its Competitors

Angel One is Zerodha’s closest competitor. Shockingly, Zerodha’s profits for FY23 are almost double that of Angel One’s at Rs 1,192 crore. Groww and Upstox are also some rising stars of the industry and their declared revenues stand at Rs 427 crore and Rs 766 crore, respectively. 

Companies like Groww do not charge onboarding and maintenance fees. This is one of the main reasons behind their substantial growth in a short period. 

Zerodha CEO however, stated that they would continue to levy these charges, adding that the account opening fee collection at the beginning helps to set expectations with traders since trading is a serious business and comes with serious monetary risks involved.

Also Read: Zerodha Launches Mutual Funds

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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.

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