'This should give VCs sleepless nights': Netizens hail Zerodha for clocking Rs 2,907-cr profit in FY23

Nithin Kamath-led broking major Zerodha has been hailed by social media users for clocking near 39% growth in profit and revenue in FY23 without ever getting any backing from venture capital firms. 

Bengaluru-based Zerodha on Tuesday reported revenue of Rs 6,875 crore in FY23 as compared to Rs 4,964 crore in FY22. Its FY23 profit rose to Rs 2,907 crore as against Rs 2,094 crore in the year-ago period. 

Users of X platform (formerly Twitter) said Zerodha's numbers are even more impressive because its founders Nithin Kamath and his brother Nikhil chose to not get funding from VC investors and hence they didn't have to chase valuation at a breakneck speed. 

"Zerodha clocked a profit of ₹2907 crores in FY23. This must be giving the entire VC ecosystem throwing money mindlessly at companies with no business model sleepless nights," said an X user. 

"Zerodha failed fast, learnt and executed fast. They used to have downtimes in 2015-18 but there was lesser digital competiton and lesser Twitter amplification then. Plus they had a first mover advantage in discount broking. I think their success is a combination of understanding trader needs, clean product philosophy and indepence of decision making (underrated factor). Covid gave a boon and a strong word of mouth makes them the leader. Full credits to the team and leadership," remarked another X user. 

One X user said, back-of-the-envelope calculations suggest Zerodha could be worth $25 billion if it were to list. 

"What a tremendous wealth creation by a 'bootstrapped startup'," quipped another Twitter user. 

"We are incredibly proud of the fact that our customers hold over Rs 3 lakh crores of securities in their demat accounts. We are happy that we are playing a role in the financialization of India," posted Nithin Kamath on X on Tuesday while announcing the firm's results. 

"Our net worth (our own capital), which comes up to 30% of customer funds, in addition to the zero debt that we have as a business, would make us one of the safest brokerage firms to deal with in India and maybe even globally," wrote Kamath in a blog post. 

He also said that Zerodha is prone to risks like newer competitors with better products, change in market conditions but said the firm is nimble enough to 'pivot'.

"The biggest risk is that the concentration of revenue from F&O also means that any regulation or change in market conditions or newer competitors with better products can reduce retail trading activity in F&O at Zerodha and significantly impact the revenue. But given our net worth, frugal operations, customer trust, and agility as a business, we are well placed to pivot whenever required," wrote Kamath.