Zerodha hints at pivot as revenue, profit take a hit Zerodha's brokerage revenues were down by 40% in the quarter ending June 2025.

"The time has finally come for business to pivot."

Nithin Kamath, Zerodha founder and CEO, in a post on Tuesday, hinted at a business pivot as the company's revenues and profitability were hit due to recent regulatory changes.

"... the regulatory actions, be it the drop in transaction charges revenue, the increase in STT on F&O, the proposal to make futures and options trading tougher, ASBA for trading, the increase in BSDA limit, etc., will have a significant impact on our revenues and profitability…," he wrote in the post celebrating 15th anniversary of Zerodha.

Founded in August 2010 by brothers Nithin and Nikhil Kamath, Zerodha is one of the largest Indian brokerage and financial services companies. A rare bootstrapped firm, the company claims to have more than 1.6 crore customers with nearly INR 6 lakh crore of equity investments and claims to contribute to 15% of daily retail exchange volumes in India.

According to an Entrackr report, Zerodha has nearly 16% of market share just behind Groww (26.27%), another brokering and financial services startup. Zerodha is followed by the likes of AngelOne and Upstox, and even conventional players such as ICICIdirect and HDFC Securities.

Kamath in his post disclosed that this year the company has seen a substantial hit of about 40% in brokerage revenues in the quarter ending June 2025 compared to the same quarter last year.

"The impact of all these changes started hitting us from October 2024, so the numbers don't fully reflect in the financial year 2024/25. This year, we are seeing a substantial hit of about 40% in brokerage revenues in the latest quarter (June 2025) compared to the same quarter last year," he disclosed.

Zerodha financials: An overview

Even as the company has not released full FY25 financials, the graph shared by Kamath shows that the revenue and profits were down by up to 15% in the said fiscal year.

In FY24, however, Zerodha generated a revenue of INR 8,370 crore along with INR 4,700 crore in profit. Compared to the previous fiscal year, revenues and profits were almost double. In FY23, the company posted INR 6,875 crore and profit of INR 2,907 crore, according to Entrackr.

To put things in perspective, its nearest rival Groww posted INR 3,145 in revenue from operations in FY24, up from INR 1,435 crore in the previous fiscal year. The company had posted a net loss of INR 805 crore in FY24 as it paid a one-time tax of INR 1,40 crore for changing its domicile back to India. Other than this, the company was operationally profitable, with profits of INR 535 crore in FY24 compared to INR 458 crore in the previous fiscal year.

Long-term play

The Zerodha founder further stated that a long-term play is important for businesses to grow and prosper.

"Let me reiterate that we are extremely privileged to be able to think this way, and not many businesses can do this in the world, let alone in India. This is possible because we don't have external investors, and internally, our philosophies of running the business align. Anyway, when we are building with 10-20 years in mind, who said that MoM, QoQ, and YoY growth are the right metrics to chase," he further said.

The long-term play in question also involves Zerodha making changes to its business model given there are regulatory interventions. For instance, Kamath says, options business might be at further risk as regulators are evaluating to do away with weekly options completely. If implemented, Zerodha may have to start charge brokerage for equity delivery trades.

Kamath says most of Zerodha competitors already charge for delivery trades.

"In any case, most of this is not really under our control. How much we earn is dependent on market cycles, regulations, and other factors. Those who think they have some of this in control and constantly tweak their businesses and products to chase optimisation, end up enshittifying their products," he wrote.

That said, Zerodha appears to be trying to preempt the possibility of a long-spell of declining profits and revenues after recording exponential growth years. Founders have previously warned of the business being volatile given the regulatory uncertainty as well. This time, however, the 40% hit in brokerage revenues looks more substantial than the theories.

Kumar Binit, Airpay Money CEO, explains that any changes in this model will have an immediate repercussions for the consumer: a cost-conscious, admittedly first-time investor may experience a trading fee increase of anywhere from 50 to 100 basis points on smaller ticket sizes.

He also highlighted that nearly one-third of all retail investors in India were introduced to the market in the last four years, many of them through the zero-brokerage online interface. It's worth noting that India's demat accounts have now gone past 202 million as of July 2025. This growth is driven by a younger demographic of investors.

"While seasoned investors may bear the blow, the remaining retail demat account holders, numbering above 12 Crore, will demand that every single rupee they pay be worth greater value. This would hasten the structural change within the brokerage space: whilst it currently competes on discounts, in the future it will compete with transparency, financial education, and richer product ecosystems. This would eventually be a positive sign for all consumers, as brokers will need to innovate beyond pricing and focus on long-term wealth creation support," Binit explained.

Not that a business pivot or changes to business model will be a completely wrong move on the part of the company to survive. While the company has been trying to distinguish itself from the rest with its bootstrapped nature, this also allows them to experiment with more things without being burdened by external investors. It's worth noting that Zerodha has silently a diverse business portfolio, including a sub-content category. Its portfolio includes Zerodha Capital and Rainmatter. According to Kamath's post, both of these verticals have continued to get bigger.