Kamath said Zerodha's revenue has not grown in real terms as the bull market has paused and transaction-fee income has fallen.
However, the loss of transaction-fee revenue is now being offset by income from its margin trading facility (MTF) business.
MTF, which Zerodha started in December 2024, now contributes around 10% of its revenue.
Its MTF book has reached Rs 9,000 crore, while customers have borrowed around Rs 6,000 crore.
According to Kamath, Zerodha is now India’s largest broker by total AUM.
Zerodha posted a net profit of Rs 4,283 crore in FY26, up around 1.2% from Rs 4,231 crore in the previous fiscal, even as its revenue remained around the same level, co-founder and CEO Nithin Kamath said in the company's latest update.
Kamath said Zerodha's revenue has not grown in real terms as the bull market has paused and transaction-fee income has fallen. However, the loss of transaction-fee revenue is now being offset by income from its margin trading facility (MTF) business.
MTF, which Zerodha started in December 2024, now contributes around 10% of its revenue. Its MTF book has reached Rs 9,000 crore, while customers have borrowed around Rs 6,000 crore.
Kamath also expressed concern over the MTF business as customers are borrowing money to invest. Customer borrowing through MTF is around 25% of Zerodha’s net worth. He said this may not be a problem when markets are rising, but could increase risks if markets fall sharply.
As per the business update, Zerodha has also seen slower growth in new accounts as the stock market has remained weak.
According to Kamath, Zerodha is now India’s largest broker by total AUM. Around Rs 1 lakh crore of this AUM came from customers acquired from IL&FS. While Zerodha’s share of active NSE customers and total demat accounts has fallen, its share of retail AUM continues to grow.
The company also admitted that mutual funds are one area where it “may have slipped up a little”. Zerodha expects its upcoming mutual fund integration with Kite to improve product discovery and the customer experience.
The company also needs around Rs 11,000 crore of capital to operate at its current size. Kamath said this requirement itself acts as a moat for Zerodha.
Beyond broking, the company is looking to build businesses across asset management, lending and insurance while continuing to invest through Rainmatter.
Overall, Zerodha remains profitable, but the growth in new customers and trading activity has slowed. The company is now focusing on growing customer assets, building new businesses and launching new products while keeping its team small.
