Zerodha profit rises to ₹4,283 crore in FY26 despite flat revenue
Margin financing has emerged as an important revenue stream, even as its rapid expansion raises concerns about leverage and market risks
Zerodha, the Indian stockbroker, reported a modest rise in net profit to ₹4,283 crore in the fiscal year 2026 (FY26), despite flat revenue of ₹8,847 crore. The profit growth, at 1.2%, was dampened by a slowdown in market activity and adjustments in transaction fees. The company's performance was influenced by a slowdown in new account additions and overall trading activity, as Indian equity markets reached their peak in September 2024.
Zerodha founder Nithin Kamath noted that the pace of customer additions had "slowed down significantly." The lack of growth in revenue despite steady profit was attributed to the removal of rebate on transaction fees and the end of the bull market. However, Zerodha's margin trading facility (MTF) contributed around 10% of its revenue, marking a new source of predictable income.
MTF's book size has reached ₹9,000 crore, with customers borrowing ₹6,000 crore, accounting for about 25% of the company's net worth. Kamath expressed concerns about the leverage, warning of potential amplified risks if Indian markets were to fall sharply. Despite the challenges, Zerodha's assets under management (AUM) continued to grow, making it the largest broker in India by total AUM.
The company is now focusing more on AUM, as it tends to remain with brokers for longer periods. Zerodha is diversifying beyond its traditional broking business, investing through Rainmatter and public markets, and preparing to launch US investing and mutual fund transactions on its Kite platform. The company continues to maintain a lean workforce and leverages AI to enhance product quality and user experience.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
