India’s largest discount brokerage, Zerodha, derived 32% of its overall revenue from interest income on customer funds during FY26, marking a structural shift in how the bootstrapped giant generates earnings. As regulatory tightening cools down high-flying derivatives volumes, interest earnings—comprising client float and lending activities—have emerged as a vital pillar supporting the top line.
According to financial data and insights shared by credit rating agency ICRA, Zerodha reported total revenue of ₹8,500 crore and a net profit of ₹4,300 crore for FY26. While headline figures remained resilient, the underlying revenue composition underwent a drastic evolution. Broking revenue shrank to 44% of Zerodha’s total top line in FY26, a steep drop from 70% in FY21.
This strategic evolution places Zerodha in a distinct operational league compared to listed competitors like Groww and Angel One, both of which maintain heavier exposures to core transaction-based broking.
Revenue Mix Divergence: Zerodha vs. Groww vs. Angel One
The structural differences across India’s top three brokerage powerhouses highlight divergent approaches to weathering regulatory headwinds:
- Zerodha: Broking accounted for 44% of total revenue in FY26, while interest income contributed 32%, making it more than four times the proportional interest share recorded by Groww.
- Groww: Over 70% of Groww’s revenue continued to be anchored by core broking activities, with interest income capturing a much smaller fraction of its top line.
- Angel One: Broking accounted for a little under 60% of total revenue, while interest income contributed roughly 31%—mirroring Zerodha’s proportional reliance on interest streams. However, Angel One’s interest metric explicitly bundles loan interest, margin trading funding (MTF), and customer float.
“Zerodha’s strengths were partly offset by its high dependence on the inherently volatile and cyclical capital market, with revenue largely driven by broking and float income, despite its diversification initiatives in allied businesses including margin trade funding (MTF), asset management and merchant banking.” — ICRA
F&O Concentration and the Rise of Margin Trading Funding (MTF)
Despite successfully dampening its overall reliance on broking, Zerodha remains intensely exposed to Futures and Options (F&O) within its brokerage segment. Derivatives trading accounts for a staggering 85% of Zerodha’s total broking revenue. In contrast, rivals Groww and Angel One operate with a more diversified broking mix, cushioned by healthier contributions from equity delivery and commodity segments.
To offset regulatory curbs on derivatives—traditionally the golden goose of Indian retail brokerages—industry players have aggressively scaled up Margin Trading Funding (MTF):
- Zerodha derived 8% of its revenue from MTF during the period.
- Groww reported that MTF contributed 10% to its revenue during the September quarter.
- Angel One continues to club its robust MTF yields directly under broader interest income streams.
The expansion in lending books has been explosive. Zerodha’s net MTF loan book multiplied more than sixfold, surging to ₹5,368 crore as of 30 June 2026, up from ₹852 crore on 31 March 2025.
Credit Risks and Balance Sheet Fortitude
While MTF serves as a lucrative growth engine, ratings agencies have flashed warning signals. ICRA cautioned that while the MTF business enhances revenue diversification, it inherently exposes brokerages to credit and market risks tied to capital market lending.
Even with these credit exposures, Zerodha commands a formidable financial cushion. The firm maintains a standalone net worth of ₹19,659 crore with zero external borrowings, securing one of the strongest capital bases in the domestic financial services landscape. Even after accounting for mandatory deployments into treasury and proprietary investments, its adjusted net worth remains an industry benchmark.
Frequently Asked Questions (FAQs)
1. What percentage of Zerodha’s revenue came from interest income in FY26?
Interest income contributed 32% of Zerodha’s total revenue in FY26.
2. How does Zerodha’s broking revenue share compare with Groww and Angel One?
Broking accounted for 44% of Zerodha’s revenue, compared to over 70% for Groww and a little under 60% for Angel One.
3. What role does Futures and Options (F&O) play in Zerodha’s earnings?
F&O trading continues to drive 85% of Zerodha’s total broking revenue despite regulatory curbs.
4. How fast has Zerodha’s Margin Trading Funding (MTF) book grown?
Zerodha’s net MTF loan book expanded more than sixfold from ₹852 crore in March 2025 to ₹5,368 crore by June 2026.
5. What is Zerodha’s current financial standing according to ICRA?
Zerodha boasts a standalone net worth of ₹19,659 crore with zero debt, supported by strong internal cash accruals.
Analytical Conclusion and Outlook
The FY26 performance metrics underline a defining transitional phase for Indian tech-first brokerages. As regulatory scrutiny systematically squeezes high-frequency derivatives trading, the industry’s long-term viability is pivoting toward asset-backed lending and interest float optimization.
While Zerodha’s pristine, debt-free balance sheet and expanding MTF book provide robust defensive moats, navigating credit default risks in retail lending will dictate the next chapter of profitability. Brokers that successfully balance diversified delivery volumes with disciplined credit underwriting will ultimately dominate the next era of India’s capital markets.
Manish Kumar began his professional journey in digital marketing and performance marketing, and currently works as a Digital Marketing Excutive and SEO expert. With over 3 years of professional experience, he handles both strategy and execution. Currently, he manages digital marketing and performance marketing at ‘Shabd Sanchi’ (shabdsanchi.com).