Zerodha’s Revenue Crosses INR 2,700 Cr, Profit Soars Over INR 1,000 Cr

The Kamath brothers-led stock broking platform Zerodha has crossed INR 2,500 Cr in  revenue operations in the financial year ending on March 31, 2021. The startup which turned unicorn without any external investment from venture capital has generated a sales worth INR 2,728.9 Cr in FY21. 

This is a 190% or a 2.9X rise from INR 938.4 Cr it generated during April 1, 2019 to March 31, 2020, i.e.FY20. 

To further understand the scale of Zerodha’s revenue growth, let us state here that its sales revenue of FY21 was also a 131.8X rise from INR 20.79 Cr it generated in FY19. 

Zerodha bifurcates its sales revenue from sale of services which comprises INR 2,252.5 Cr and other operating revenues which was pegged at INR 476.4 Cr in FY21. 

To present a comparison for FY20 here, Zerodha’s revenue from sale of services stood at INR 718.3 Cr and its other operating revenues stood at INR 220 Cr in FY20.

Zerodha’s other income for FY21 stood at INR 67 Lakh, a drop from INR 155.2 Cr from FY20. When combined, the Bengaluru-based startup’s total revenue for FY21 was pegged at INR 2,729.6 Cr, a 2.5X rise from INR 1,093.7 Cr in FY20. 

The startup’s total expenses also climbed to INR 1,260.1 Cr during April 1, 2020 to March 31, 2021. This was a 143.4% rise from INR 517.6 Cr it spent during FY20. 

The startup’s most notable expenses were its employee benefit expenses and other expenses. Employee benefit expenses of Zerodha was INR 316.4 Cr for FY21. This was a 104% increase from INR 155 Cr it spent in FY20. 

Zerodha’s employee benefit expenses comprises salaries and wages of employees (managerial remuneration, remuneration of directors, among others included), contribution to provident and other funds, gratuity, staff welfare expense, and other employee benefits expense. 

Zerodha spent INR 228.8 Cr to pay salaries and wages of employees. 

In FY20, the startup was shelling out INR 90.6 Cr for salaries. Earlier last year, the startup community was surprised with the news of Kamath brothers and Seema Patil (wife of Nithin Kamath) taking home INR 100 Cr each as their annual salary surfaced. 

Later Nitin Kamath clarified that the salary they are getting is lower from what is reported. In a thread of tweets he said that trading business is risky,  and it was important for promoters to take liquidity when the firm is ‘up’ to reduce the risk. The entire thread of Kamath’s clarification can be found here. 

Last year, multiple reports of Zerodha planning to launch its $300 Mn worth of ESOP buyback surfaced which would help the stock broking firm’s valuation touch $2 Bn. 

The startup during FY21 as per its financial statements has granted 53,52,497 stock options to its eligible employees You can find all the major ESOP related developments that have taken place last year including ESOP allocation, buyback here. 

Zerodha’s other expenses stood at INR 926.2 Cr in FY21, a notable jump from INR 347.3 Cr in FY20. 

However, the startup continued to remain profitable in the FY21. It saw its profit grow to INR 1,122.3 Cr in FY21, a 164.7% increase from INR 423.9 Cr in FY20. In FY19, Zerodha’s profit was pegged at INR 18.3 Cr. 

Started in 2010 by Nithin and Nikhil Kamath, Zerodha offers stockbroking services. The bootstrapped startup claims to have over a million active clients who trade and invest through the platform. The startup offers four major products:

Kite: Its flagship trading platform
Console: A central dashboard like platform to manage all Zerodha accounts
Coin: To invest in mutual funds
Kite Connect API: API platform for developers

Zerodha competes against the likes of new age internet companies such as Groww, and Upstox who are enabling millennials to enter the stock market with a user-friendly app interface with one-tap creation of a free demat account. 

As per Association of Mutual Funds in India, the average assets under management (AAUM) of the Indian mutual fund industry for the month of January 2022 stood at INR 38,88,571 Cr. 

The AUM of the Indian MF Industry has grown from INR 6.59 Tn as on January 31, 2012 to INR 38.01 Tn as on January 31, 2022 more than 5½ fold increase in a span of 10 years.