How Zerodha Makes Money: Brokerage, Options and FY25 Reality
Updated: 8 hours ago
The short answer
Zerodha makes money primarily from brokerage on trading — especially futures and options — plus related fees, interest income and investment-management / software lines. Equity delivery trades are ₹0 brokerage. Intraday and futures cost the lower of 0.03% or ₹20 per executed order; options cost a flat ₹20 per executed order (Zerodha charges page).
In FY2025–26, Zerodha's audited financials, shared by founder Nithin Kamath in his August 2026 Z-Connect update, put revenue at ₹7,464 crore and profit after tax at ₹4,283 crore (vs ₹4,231 crore in FY25), well below the FY24 peak of ₹9,973 crore revenue and ₹5,495 crore profit. Brokerage fell to ₹2,738 crore from ₹3,066 crore, while interest income (₹2,269 crore) and delayed-payment + margin-trading income (₹448 crore) now fill much of the gap.
Key number | What it shows |
₹7,464 Cr | FY26 revenue |
₹4,283 Cr | FY26 profit after tax |
₹0 | equity delivery brokerage |
₹20 | F&O order cap |
Figures: Zerodha charges page; Nithin Kamath, "16 years of Zerodha: Fresh enthusiasm" (Z-Connect, 26 Aug 2026, citing Zerodha audited financials); earlier FY25 RoC readings from Entrackr / Financial Express; Nithin's 15-year Z-Connect post (30 Sep 2025). Not investment advice. Updated 10 November 2026.
Zerodha revenue mix: FY24 to FY26
₹ crore | FY24 | FY25 | FY26 |
Brokerage | 3,600 | 3,066 | 2,738 |
Net transaction charges | 810 | 400 | 0 |
AMC charges | 140 | 160 | 180 |
Interest income | 1,700 | 2,370 | 2,269 |
Delayed payment + MTF | 0 | 22 | 448 |
Profit after tax | 5,495 | 4,231 | 4,283 |
Source: Zerodha audited financials, as charted in Nithin Kamath's August 2026 Z-Connect post. The rows are selected revenue lines, not a full breakdown. Total revenue was ₹7,464 crore in FY26 vs ₹9,973 crore in FY24. Net transaction-charge income went to zero as the rebate on transaction charges went away; Nithin says MTF earnings are now offsetting that loss. Note: RoC-based press reports (such as Entrackr's ₹8,847 crore FY25 figure quoted on older versions of this page) use a different revenue definition, so compare like with like.
Zerodha's net worth was ₹16,098 crore at 31 March 2026, the highest among the 17 brokers it compared in the same post.
The discount-brokerage bargain
Zerodha (Zero + *rodha*, "barrier") popularised a simple deal for Indian retail:
Investing (delivery): free brokerage, so long-term buyers are not nickeled on every buy.
Trading (intraday / F&O): a low flat-ish fee so active traders still generate most revenue.
That is why "how Zerodha makes money" is not the same question as "how Zerodha markets itself." Marketing emphasises free investing. The P&L emphasises people who trade often.
Account opening is free (Zerodha made it free in February 2024, per Nithin's post). Demat AMC applies after the first year on published slabs (BSDA vs non-BSDA). Coin direct mutual funds charge no commission from Zerodha on the investing side — Zerodha earns elsewhere in the group (for example fund-house economics via Zerodha AMC), which is separate from broking brokerage.
Where the rupees come from
1. Brokerage (the core)
Every executed F&O order can throw off up to ₹20. Multiply by millions of active traders and weekly options expiries, and you get a multi-thousand-crore machine. Entrackr notes brokerage remains the primary revenue stream, with investment-management fees, software services and interest income also contributing.
When SEBI raised securities transaction tax on options, cut weekly expiries toward two contracts, lifted BSDA limits and exchanges changed rebate structures, that machine slowed. Nithin wrote that the hit began showing from October 2024, so FY25 only partly reflects it — and Q1FY26 brokerage was down ~40% YoY.
2. Interest and balance-sheet float
Brokers earn interest-related income on client funds and financing products within rules. In his August 2026 update, Nithin said the Margin Trading Facility (MTF) book had reached about ₹9,000 crore, of which about ₹6,000 crore is borrowed — roughly 25% of Zerodha's net worth — and that MTF is now about 10% of revenue. He called it the one area where business growth is "scaring" him, warning that markets could fall sharply and that Zerodha is keeping a close eye on it. The separate Zerodha Capital loan-against-securities book was cited at around ₹430 crore in his September 2025 update.
3. Adjacent products
Coin (mutual funds), Console (reporting), Kite (trading), Rainmatter investments and educational brands (Varsity) deepen the relationship. They are not the main profit engine, but they raise switching costs and feed AUM. Nithin's 2026 post says Zerodha is now the largest broker in India by total client AUM, and its chart puts Zerodha's AUM share at 12.6%, against a 7.7% share of demat accounts.
FY25 costs: still a high-margin business
Even after the slowdown, margins stayed rich. Entrackr put EBITDA margin near 64% and ROCE near 32% (down from ~42%). Total costs rose modestly to about ₹3,238 crore. Salary cost rose ~31% to ₹539 crore. Fees and commissions (exchange-related and similar) were about ₹2,328 crore — a reminder that a big slice of "brokerage revenue" is shared with market infrastructure.
NSE data cited in the same coverage: about 7.26 million users and ~15.8% market share on the metric used. Nithin cautions that "active client" league tables can be gamed by brokers pushing notifications; he pays more attention to client assets.
The risk Nithin keeps naming
In his September 2025 15-year note, Kamath repeats a thesis he has voiced for years: almost every brokerage model in India leans on active options traders, and regulators were always likely to question that activity. If weekly options were restricted further, he wrote, Zerodha might have to start charging for equity delivery to keep the business tenable — as most competitors already do.
That is the clearest insider statement of how fragile the "free investing" social contract is. Free delivery is subsidised by trading. Shrink trading enough, and free delivery becomes a luxury.
Compare this with how NSE makes money (transaction charges, clearing, data): exchanges and brokers both drink from the same activity well. When SEBI turns the tap, both feel it.
Related explainers
More from our series on how companies make money:
FAQ
Does Zerodha charge for buying stocks?
Delivery (investing): ₹0 brokerage. Other statutory charges (STT, exchange fees, SEBI fees, stamp duty, GST on brokerage where applicable) still apply. See zerodha.com/charges for the live schedule.
Why did FY25 profit fall?
Lower trading activity plus regulatory changes that hit F&O volumes and related economics from late 2024, per company commentary and RoC-based reporting.
How much did Zerodha earn in FY26?
Revenue of ₹7,464 crore and profit after tax of ₹4,283 crore (up slightly from ₹4,231 crore in FY25), per Zerodha's audited financials shared in Nithin Kamath's August 2026 Z-Connect post.
Is Zerodha venture-funded?
No. It is bootstrapped / promoter-owned. Nithin cites that as why the firm can think in 5–10 year averages instead of quarterly growth theatre.
Sources
https://zerodha.com/charges/ (pricing)
Nithin Kamath, Z-Connect, 26 Aug 2026: "16 years of Zerodha: Fresh enthusiasm" (FY24–FY26 audited figures)
Nithin Kamath, Z-Connect, 30 Sep 2025: "15 years of Zerodha — The risk crystallises"
Entrackr Fintrackr and Financial Express: FY25 RoC revenue, profit, cash, cost lines
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