Zerodha is a well-known online stock broker for customers who choose to trade without a broker’s help. Only online trading services are available to customers at Zerodha, an online bargain brokerage. For trading in the equity, equity F&O, commodities, and currency F&O divisions at the BSE, NSE, and MCX, Zerodha offers low-cost brokerage. The inexpensive stock broker Zerodha also provides mutual funds and depository services. The most cutting-edge stock broker at the moment is Zerodha.
The Bengaluru-based unicorn Zerodha, the largest stockbroking platform in India, reported a profit of 2,094.4 crores for the financial year (FY) 2022, at a time when the majority of Indian businesses are having difficulty turning a profit.
In FY22, Zerodha’s operating revenue increased 82% to Rs 4,964 crore from Rs 2,729 crore, as reported in its consolidated annual financial statements filed with the Registrar of Companies (RoC).
INCREASE IN REVENUE
In terms of client turnover, Zerodha, India’s largest brokerage firm, claimed an increase in profit of 86%, or Rs 2,094 crore, for the fiscal year (FY) 2021–22. The company’s operating revenue increased 82% to Rs 4,964 crore within the same time.
Although interests also contribute significantly to the company’s revenue, intraday equity and derivative traders account for the majority of that money. Nearly 18% of all active clients on NSE as of December were customers of the organization.
“Pass-through exchange transaction fees, which we receive from customers and pay to the exchanges, account for close to 25% of our revenues. Technically speaking, this is not our income; if we were to eliminate it, our margins (PBT, or profit before taxes/revenue), would be close to 70%,” he had said.
Kamath further stated that since March 2019, the company has paid over Rs 1800 crore in corporate tax.
Brokerage commissions, the sale of its high-end tech products like Kite Connect API, user onboarding fees, and exchange transaction fees that are collected from customers on behalf of several stock exchanges are all ways that Zerodha generates revenue. From Rs 2,252.5 crore in FY21 to Rs 4,129 crore in FY22, revenue from these services increased by 83.3%.
As compared to January 2022, Zerodha also saw a drop in monthly new account openings of about 50%. The company’s interest revenue increased by 43.4% to Rs 614.5 crore, and it also brought in Rs 220.5 crore from other operations, including dividend income and net gain on fair value adjustments.
A considerable increase in its IT expense, which increased to 145.5 crores in FY22 from 16.87 crores in FY21, was noted in the provided year, which saw a 775% year-over-year increase in total expenses to 359.4 crores. Among other trading platforms present in India, Groww reported an increase in net profit of over 2.5 times in FY22, from 2.6 crores to 6.8 crores. The operating revenue of the online trading platform increased by almost 8x to 348 crore in FY22 from 40.5 crores in FY21.
RECORDS AND DOCUMENTS
According to documents filed with the Registrar of Companies (RoC), which data intelligence platform Tofler has access to, the profit increased 87% over the prior year.
The unicorn offers share brokerage, financial consulting, and portfolio management services. Nithin and Nikhil Kamath launched it in 2010. Its expense for employee benefits increased by 45% to 459 crores. Other expenses, which increased by 82% to $1,686.5 crore over the course of the year and included miscellaneous charges of $1,342.4 crore and information technology expenses of $303.1 crore, were significant contributors to this. The statement continued by stating that the target market, or those consumers who have enough savings to invest in the market, has “temporarily hit a plateau.”
According to the statement, “The business will also probably be influenced by the rapidly evolving regulatory environment, where, among other things, the working capital needs are increasing.”
The stock trading platform states that it processes daily orders for more than 10 million customers. According to its website, around 15% of India’s total retail trading volumes are comprised of transactions on the stockbroking platform. Investments and technological items make up the platform’s offerings.
A rise in IPOs during FY22 was accompanied by an increase in Zerodha’s daily average users. The company will develop slowly since there won’t be as many initial public offerings during the next six months, said chief executive Nithin Kamath.