Zerodha Revenue Shift: Interest Income Surpasses Broking Reliance
Interest income now accounts for 32% of Zerodha's revenue amid regulatory shifts in derivatives.
1Revenue Composition Shift
In FY26, Zerodha generated ₹8,500 crore in total revenue, with interest income contributing 32% of that figure. This marks a significant pivot as the firm reduces its historical reliance on broking fees. Broking revenue dropped to 44% of the total, a sharp decline from the 70% share recorded back in FY21.
2Competitive Revenue Benchmarking
Zerodha's interest income share is four times higher than that of its rival Groww. Meanwhile, Angel One reported that interest income accounted for approximately 31% of its total revenue during the same period. These figures highlight how major brokerage firms are increasingly diversifying their income streams beyond traditional transaction-based commission models.
3Derivatives Market Dependence
Despite efforts to diversify, Zerodha remains heavily reliant on derivatives trading, which accounts for 85% of its total broking revenue. Regulatory curbs on these instruments have forced the firm to seek alternative growth drivers. In contrast, Groww and Angel One maintain a more balanced mix including equity delivery and commodities trading.
4MTF Business Expansion
Margin Trading Funding has become a critical growth engine for brokers facing regulatory pressure. Zerodha's net MTF loan book surged sixfold, reaching ₹5,368 crore by June 30, 2026, compared to ₹852 crore in March 2025. Currently, MTF contributes 8% of Zerodha's total revenue, while it accounts for 10% of Groww's revenue.
5Risk Profile Assessment
ICRA has identified risks associated with this shift toward lending businesses. While MTF improves revenue diversification, it exposes firms to credit and market risks inherent in capital market-related lending. The agency notes that Zerodha's strengths are partially offset by its continued high dependence on volatile and cyclical capital market conditions.
6Strong Capital Position
Zerodha maintains one of the strongest capital bases in the domestic broking industry. The firm reports a standalone net worth of ₹19,659 crore and operates with zero borrowings. This robust financial position provides a buffer as the company navigates the transition away from its traditional reliance on pure broking revenue.
7Industry Revenue Dynamics
The definition of interest income varies across firms, with Angel One including revenue from loans, margin trading, and customer float under this category. As regulatory scrutiny on derivatives intensifies, the industry is moving toward a model where interest-based earnings play a larger role in sustaining profitability for major brokerage platforms.
8Strategic Future Outlook
Zerodha's strategy involves balancing its core broking business with allied initiatives like asset management and merchant banking. The firm must manage the credit risks of its rapidly expanding MTF book while mitigating the volatility of its derivatives-heavy revenue. Success depends on maintaining this diversification without compromising its strong standalone net worth.