Stockbroking platform Zerodha has reported a revenue of over Rs 8,370 crore and a profit of Rs 4,700 crore, according to a blog post by the company's co-founder and CEO Nitin Kamath. This marks a significant increase from the reported operating income of Rs 6,875 crore and profit after tax of Rs 2,907 crore in FY23. The company has not yet officially submitted its audited annual report.

Data disclosed by Zeroda indicates that more than half of its revenue has translated into profit. Kamath added that the company is already facing revenue and profitability challenges and is gearing up for a significant revenue decline later this year.

The company has linked the expected decline in scale to upcoming regulations by the Securities and Exchange Board of India (SEBI), which will scrap the volume-based transaction fee model for free equity delivery trades affecting all brokers, including Serodha. With SEBI's true-to-label circular going into effect on October 1, Zerodha expects a 10% revenue decline due to the regulation.

The new Basic Service Demat Account (BSDA) limits set by the regulator will also impact Seroda's Annual Maintenance Charges (AMC). Kamath explained that the company will be able to charge full AMC to customers with demat holdings of Rs 10 lakh or above, up from the current limit of Rs 4 lakh. Along with the removal of account opening fees, this will result in a significant reduction in revenue.

Zerodha is confident of weathering the slow period due to its small team, careful spending and strong financials. There are now 1,200 employees, but only a small fraction of them run the core business.

This time last year, headlines noted how Grove had surpassed Zeroda in terms of active users. However, there is no doubt that Zerodha is the best model in terms of its business model and profitability, and the recent forays into passively managed mutual funds on its own will boost the numbers.