Zerodha Valuation

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With over a million clients, Zerodha is a leading digital stockbroking platform in India. With a positive report of profit of around ₹350 crores, here is the complete Zerodha Valuation for you. 

Zerodha’s digital platform is built with brand new technologies namely – Console, Zerodha Kite, trading charts, etc. Besides, there have been significant improvements in its speed and design. 

Other latest features such as biometric, Console widgets, ChartIQ, instant status updates, and push notifications are also available in Zerodha.

All these advancements are a result of massive fame and huge profits. In what follows, discussed are the factors that aided the success story of Zerodha. Dive in for the Zerodha Valuation 2020.

Zerodha Company Valuation

As per the latest report on Zerodha Valuation, Zerodha has become India’s first discount broker. But this wasn’t the scenario when the company just started. 

Zerodha and its founder claim to have faced the worst circumstances during the initial years of its establishment. 

But as they say – what is earned with hard labor is eaten with pleasure. In its 10-year tenure, Zerodha has garnered over a million active clients who generate more than ₹15 lakh revenue daily, through their trades.  

This, according to the NSE, is the highest record ever in the history of Indian brokering.

Zerodha Revenue

After the Zerodha Valuation, next comes the revenue of the company.

In terms of the number of clients, Bangalore-based Zerodha is leading the online stock trading market. It has surpassed traditional giants like  HDFC Securities, ICICI Direct, Motilal Oswal, Sharekhan, and Kotak Securities

On average, about 2 million trades per day have been recorded on the Zerodha platform (a huge contributor to Zerodha valuation).

Besides, the company was recognized as the best retail brokerage firm for 2018 (in India ).

The reason behind this progress is Zerodha’s exclusive discount strategy wherein stock trades are free. 

Zerodha primarily earns its revenue from the transaction fees. This fee amounts to max ₹20 and is charged on futures, options and intraday trading transactions. 

Zerodha Revenue Model 

For a company to work wonders, there has to be a mantra that it follows, isn’t it?. Well yes, Zerodha too works on a business model that directly affects its revenue. Here’s Zerodha valuation on its revenue model.

Zerodha charges a minimal transaction fee which is why its trading volume is high. A high volume means a large number of clients which, in-tern leads to good revenue. 

Moreover, low operational cost is also responsible for such great client footfall.

(Zerodha’s online structure facilitates low operational costs.)

Hence, Zerodha’s revenue model is “discount broking” wherein it charges a low commission. This attracts investors and particularly the budding ones. 

This model is undoubtedly the reason behind its solid client base (more than 1 million).

The year 2010 was that time when investing in the stock market was a costly affair. Also, not everyone could afford the same.

Because Zerodha commenced in 2010 with its unique low brokerage provision, it got the first-mover advantage. Never before in India had a firm come up as a discount broker. 

To know about the Zerodha brokerage in different trading segments, refer to Zerodha Brokerage Calculator.

Zerodha Valuation Revenue 2018

In the financial year 2018, Zerodha earned revenue of ₹4.5 billion. This was two times more than that in the previous financial year.

Besides, the company’s profits doubled to 2 billion rupees in 2018

Zerodha Valuation Revenue 2019

With a total client base of more than 1.6 million, Zerodha earned revenue of ₹850 crores in the financial year 2019.

The claimed net profit on this revenue was ₹350 crores in the same financial year.

Zerodha Valuation Revenue 202o-21

The latest numbers talk at a different level altogether. Today as per the latest numbers, Zeordha has in excess of 3.5 Million clients and booked a profit of more than 440 Crores for this financial year.

Zerodha Net Worth

It may be surprising that a zero brokerage business can have such massive gains. Well, as unlikely it may seem, it is 100% true for Zerodha. 

With a net worth of ₹600 crores, Zerodha is currently Indis’s largest discount broker with a client base of more than 1 million. 

The company is very popular among millennials and the Gen Z population. Moreover, it boasts a business gain of a massive INR 6600 crore!

Zerodha founders Nithin and Nikhil Kamath credit the company’s success solely to its business model. Their business idea is an Indian adaptation of Robinhood’s business model.

Needless to say, the model has worked wonders for the company and has garnered huge success. 

Zerodha is doing so well that it has left behind Its rivals such as HDFC Securities, Kotak, ICICI Securities, etc. (again a thumbs up in Zerodha valuation)

Zerodha Profit

“Zero” and “Rodha” (obstacles in Sanskrit) club together to form Zerodha. This clearly implies a trading platform with zero obstacles. With a striking growth over the past few years, Zerodha’s active-user count has increased 14 times since 2016

According to the National Stock Exchange of India, Zerodha is among the nation’s 10 largest brokers.

Zerodha deals in stocks, commodities, and exchanges since 2010. The company hit revenue of ₹220 crores and made a profit of ₹120 crores just after 7 years of its opening i.e. in the financial year 2017. 

For budding traders, it may not be easy to handle money.

Therefore, Zerodha aims at boosting financial literacy in India. It can be rightly said that Zerodha has built a great execution platform for people to know and learn trading and buying. 

Zerodha Profit Loss

Zerodha active clients can view their profit and loss in the “Q” back office as well because it keeps track of all profits and losses.

Besides, P&L only indicates net profit i.e. realized profit – brokerage charges. Any other debits or credits do not reflect in the “Q” back office.

Zerodha Profit Loss Statement

The Profit and Loss statement abbreviated as the P&L statement is a statement of operations and earnings. It portrays the following information:

  • The revenue generated (yearly or quarterly)
  • The expenses/losses incurred
  • Taxes levied
  • The earnings per share

The profit and loss statement shows the profitability of completed trade in a specified financial year. It is an estimate, that can be used to revise the garnered profits/incurred losses later.

To view your profit and loss statements, following these steps:

  • Log in to the console then click on reports.
  • Select P&L (which implies profit and loss)
  • After the P&L window opens, from the drop-down menu select the segment whose profit and loss you wish to know.
  • You can view combined, realized and unrealized P&L
  • Once you have chosen the type of P&L, choose the dates that you wish to revise.
  • The P&L statement that you desire to view will load. 
  • You can also download the P&L statement by simply clicking on the download option.

The client requested profit and loss report is made on grounds of his/her trades and relevant data available with Zerodha.

Note that this data only pertains to that specific time when the report is being generated. 

Zerodha is not legally liable or responsible for the authenticity of the presented report. 

You can double-check your P&L report by verifying it with the following documents (if available with you) – trade book, contract notes and funds statements. 

Zerodha Profit Margin

The profit margin can be calculated by dividing the gross profit earned by the revenue generated. Likewise, the profit margin percentage can be found out by multiplying the result by 100. 

If the profit margin turns out to be 25%, you have earned a 25% profit on the total revenue.

A good profit margin varies from industry to industry. However, in general, a net profit margin of 10% is average while a profit margin of 20% is “good”.

Zerodha Profit 2019

Zerodha’s lucrative discount strategy has generated a revenue of about 5 billion rupees in the year 2019. The same was rupees 2 billion in 2017. The company’s profits had doubled during the same period.

When Zerodha commenced in 2010 as a broker, it was not the best time to enter in the stock market.

Besides, the crisis that had occurred in 2008, had let down most of the brokering firms.

At that time, even renowned firms like Indiabulls made only 5% of its revenues from brokering.

In short, it was a time when people were not really investing in stock markets when Zerodha had started the business.

As of now, Zerodha boasts an active investor base of 1.02 million and an overall client base of above 1.6 million.

A net profit of ₹350 crores against revenue of ₹850 crores was reported by the company in the last financial year i.e. 2019.

Zerodha Turnover

Zerodha, which is now a leading trade platform was ambitious since its initial days. As a matter of fact, this trait has led to its current success in the complex market. 

The company aimed at doubling its daily transaction turnover by the end of the next financial year 2013, which was only 3 years post its establishment.

According to the NSE, Zerodha’s daily average turnover is ₹2000 crores.

Zerodha CEO

Nithin Kamath is the founder and CEO of Zerodha. He founded Zerodha just a decade ago (in 2010). In merely a 10-year tenure, Zerodha currently accounts for 15% of the Indian retail trading volume.

With the hard work and business strategy of Kamath, who started trading from his college days, Zerodha has become India’s largest stockbroker. He initially started with 6 people but now Zerodha has more than 1300 employees.

According to Nithin Kamath, the idea behind starting Zerodha was to make sock trading barrier-free. Hence, he came up with such a literal name – zero+rodha. 

Considering the current scenario, Zerodha comes up with unique strategies regularly. This ensures its relevance in the market and helps it surpass its rivals.

Nithin Kamath Zerodha Net Worth

The 39-year-old Kamath’s net worth is estimated to be around ₹6,600 crores.

As a budding entrepreneur, Nithin thought of wealth only in materialistic terms. However, with the passing years and business experiences, he claims that wealth is all about being content. 

As per this self-made billionaire, being grounded after massive achievements is the most important.  His role models are Wipro’s Azim Premji and Infosys’ NR Narayana Murthy.

Stockbroking is an extremely complex field when it comes to the trading mechanism. Zerodha under the guidance of its pioneers constantly makes efforts to avoid technical glitch. 

Zerodha Success Story

In an attempt to make trading barrier-free, discount brokerage firm Zerodha has had an impressive success graph since 2010.

The firm’s hard work has paid off in its 10-year long history where it dethroned the long-time leader ICICI Securities

Its journey has led it to become the largest brokerage firm in India with around 10 lakh active clients. Nearly 50,000 to 70,000 new Zerodha accounts are made every month.

The company has brought in many “firsts” in India’s brokering history. The most popular one, Zerodha is India’s first “discount brokerage” firm.

With a fee of flat ₹20 per trade, irrespective of its size, Zerodha has become a pioneer in India’s discount brokering.  Zerodha’s “no brokerage” policy was deemed as disruptive by experts when the company has just set up. 

The irony is, this very feature made Zerodha a hit among traders and as they say, the rest is history!

Another important reason for the firm’s rapid growth is the company’s efforts to keep up with the latest trends, ideas, and strategies.

To sum up, the secret to Zerodha’s success is its “zero-brokerage”. This attracts the investors who walk in seeing a low investment. Zerodha has literally made trading possible for those who hesitated due to the high amount involved in doing so. 

Besides, Zerodha’sautomated system for pledging one’s Demat holdings to raise margin money is incredible.

No interest is charged on the margin money if an equivalent amount of cash maintained in the account.

Well, which trader can resist this appealing combination of discount brokerage and zero-interest margin money! 

All this has contributed a lot to Zerodha Valuation and Profit Margin.

Bottom Line

Whether it is about Zerodha Valuation, Revenue or Profit, the company is doing great in every aspect to fulfill the requirement of business as well as its clients.

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