Zerodha remains one of India’s most profitable fintech companies, but the engine that built the business is beginning to slow. Broking revenue fell 10.4% to ₹2,738 crore in FY26, while income from exchange transaction-fee rebates disappeared following regulatory changes. Despite this, profit edged up to ₹4,283 crore, showing that newer revenue streams are increasingly cushioning the decline in trading-led income.
Margin trading has emerged as one of those alternatives. Zerodha’s MTF book has grown to around ₹9,000 crore, with customers borrowing roughly ₹6,000 crore. Founder Nithin Kamath has said the business is now helping offset lost transaction-fee revenue, although he has also flagged the risks that come with leveraged investing and said the company is monitoring the segment closely.
Asset management is another growing piece of the diversification strategy. Zerodha Fund House now manages roughly ₹15,000 crore across 17 funds and serves more than 11.5 lakh investors. The company is also adding products such as fixed deposits, NPS and broader mutual fund access within Kite, as it looks to capture more of customers’ financial activity beyond active trading.
The pressure is becoming more visible as rival Groww expands faster among retail investors. In July, Groww had 13.12 million active clients compared with Zerodha’s 6.76 million. Zerodha, however, has maintained that customer count alone is not its priority, preferring profitability, capital efficiency and organic growth over aggressive acquisition.
That leaves Zerodha with a different challenge from most fintechs. It does not need to fix an unprofitable business; it needs to find new growth before its highly profitable core becomes structurally smaller. MTF, mutual funds, lending and other products are beginning to contribute more, but their ability to eventually replace brokerage-led growth will determine how Zerodha’s next chapter takes shape.
Filed by
Startup Unplugged
