Zerodha achieves Rs 8,320 crore revenue in FY24: Stock broking platform Zerodha reported revenue at Rs 8320 crore and profit at Rs 4700 crore for FY2023-24, the company’s co-founder and CEO, Nithin Kamath said in a blog post. The profit, he added, doesn’t consider the Rs 1000 crore of unrealised gain, which will show in the company’s financials. For FY23, Zerodha has reported a 38.5 per cent YoY growth in revenue at Rs 6875 crore. Profit for the period was recorded at Rs 2907 crore, posting a growth of 39 per cent. “Given the profitability of the last three years, our net worth is almost ~40 per cent of the customer funds that we manage. It makes us one of the safest brokers to trade with,” Nithin Kamath said.
However, with many risks around the corner, Nithin Kamath said that the company is bracing for a big revenue hit later this year. He listed the following reasons that will impact the revenue numbers going forward:
- With SEBI’s true-to-label circular that will go live on October 1, 2024, there will be a 10 per cent revenue dip.
- SEBI recently published a consultation paper on index derivatives that was open to public comments. “We expect this paper to materialise into regulation sometime in the next quarter. Index derivatives today are a significant portion of our revenue, and any change will impact us,” said Nithin Kamath while adding that he expects a 30-50 per cent drop in revenue due to this.
- STT goes up from October 1st, 2024 and while Nithin Kamath said that the impact on options trading is minimal, a significant impact is anticipated on futures trading.
- The amount of Annual Maintenance Charges (AMC) we collect changes with the new Basic Services Demat Account (BSDA) thresholds set by the regulator. “Essentially, we can charge full AMC from customers with a demat holding of Rs 10 lakh and more, as opposed to 4 lakh today. Combined with us removing the account opening fee, this would be a meaningful drop in revenue,” he added.
- “We have run a decent-sized partner and referral program from the very beginning relying on customer word of mouth. Customers referred other customers, and we shared a small percentage of the brokerage as a commission. We have had to stop these payouts because the exchanges issued new guidelines saying a payout can be made only to Authorised Persons (AP) registered on the exchanges, Nithin Kamath said, adding that this will reduce the number of people referring to only a few registered APs, affecting growth.
In addition to all of this, Nithin Kamath also talked about the risk of the bull market ending at any time, which can bring significant drawdowns. However, he added, “We are well covered to get over the lull period with a lean team, efficient expenses and infrastructure and material costs, and a strong net worth. Even today, the overall team size stands at 1200, with the core team responsible for running the business being a small fraction of it.”
From: financialexpress
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