The country’s largest brokerage house by revenue, Zerodha, has seen its topline and net profits decline by 15 percent in FY 25, after multiple regulatory changes, including the Futures and Options (F & O) trading rules, hit the business.
The Bengaluru-based firm has warned that FY 26 could see an even more dramatic decline of 40 percent in revenue from that of FY 24, the company said in an annual blog post.
Zerodha saw its net profit fall to Rs 4,200 crore in FY 25, compared with around Rs 5,500 crore in the preceding fiscal. The company reported around Rs 8,500 crore in revenue in FY 25, compared with around Rs 10,000 crore in FY 24.
The regulatory changes
“The increase in STT (securities transactions tax)on options and the reduction of expiries to two weekly contracts on options. Along with these changes, the increase in the BSDA (Basic Services Demat Account) limit, the removal of the exchange transaction charges rebate, and a general drop in market activity, our revenues and profits took a hit last year, as we had expected,” Nithin Kamath, founder and CEO, said in the blog post.
Since most of these changes started kicking in from October 2024, the impact was rather muted in FY 24, with the prognosis for the current fiscal being even worse.
“This year, we are seeing a substantial hit of about 40 percent in brokerage revenues in the latest quarter (June 2025) compared to the same quarter last year,” Kamath added.
The competitive landscape
Interestingly, IPO-bound Groww has reported only a 10 percent decline in revenue during the June quarter. Groww, the largest brokerage firm in the country by number of active investors, reported a three-fold growth in profit to Rs 1,819 crore in FY 25.
The Bengaluru-based fintech reported a 31 percent growth in revenues at Rs 4,056 crore during FY 25, mostly owing to the growth curve of the company. It has been trying to diversify its revenue away from F & O trading and focussing on wealth products.
Most brokerage business model relies on earnings from active traders who trade options. Publicly-listed Angel One has seen its revenue fall by almost 30 percent from its peak.
Kamath of Zerodha warned that Zerodha might be forced to charge for equity deliveries as more regulatory changes are coming to dissuade F & O trading.
Zerodha might consider a business pivot
“The options business might be at further risk, with the regulators evaluating whether to stop weekly options completely. If this were to happen, we would be forced to start charging brokerage for equity delivery trades to make the business tenable,” Kamath said.
Meanwhile, the competitive intensity has resulted in Zerodha’s market share in active traders coming down from 22 percent in early 2023 to around 16 percent now. However, the company’s market share in terms of client assets accounts for about 10 percent of all retail and high-net worth individuals' assets under management (AUM) in the country.
The market sentiment
The top four brokers in the country have lost nearly 20 lakh active investors in the first half of 2025, despite the markets delivering positive returns during four consecutive months, according to data available with the National Stock Exchange.
Investors attribute the sharp decline in their active client base for the second consecutive quarter, driven by waning interest in futures and options (F&O) trading amid stricter regulatory norms introduced by Sebi last year.
Groww, Zerodha, Angel One, and Upstox, the country’s four largest brokers by active investors, collectively lost nearly six lakh active investors in June, marking the end of a challenging first half.
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