Chapter 7

The dealer’s cut

Published 30 September 2026

Every hand dealt at this table passes through a dealer, and the dealer gets paid whether you win or lose. The biggest dealer in the country is a bootstrapped Bengaluru company that never raised a rupee of venture money, never ran a Super Bowl ad, and built one of the most profitable brokerages on earth out of flat ₹20 order tickets. This is Zerodha's chapter, and its own numbers tell the story.

Start with the money. Zerodha's FY25 financials, filed with the Registrar of Companies, show revenue of ₹8,847 crore and net profit of ₹4,237 crore. The profit margin is close to 48% - a number that consumer internet companies burn cash for a decade dreaming about. The year before, the profit was ₹5,496 crore on ₹9,993 crore of revenue - a 55% net margin. And the cushion underneath it all: cash and bank balances of ₹22,679 crore, on an EBITDA margin of 63.78%, accumulated entirely from operations. No investors to repay, no IPO clock, no quarterly earnings theatre. Just a toll booth, printing.

The engine under the flat fee

What produces a 48% margin on a ₹20 ticket? Volume, and the mix inside it. Discount brokerage is a misnomer - the cheapness applies to delivery trades and equity investing, the products most customers rarely use. The revenue engine is the active trader, and the active trader in India trades F&O. Every option order - buy or sell, win or lose, expiry or rollover - pays brokerage, and the client base trades by the crore of orders. The Economic Times' report on the FY25 numbers records the revenue fall from ₹9,993 crore in FY24 and the 23% profit decline - and the reason given is regulatory headwinds, which is the industry's way of saying: the F&O tap was tightened, and the money responded immediately.

Read that backwards and the business model confesses itself. When the regulator cut weekly expiries, raised the tax on options, and tripled contract sizes in late 2024, Zerodha's revenue fell 11.5% and profit fell nearly 23% in the same year. Nothing else about the company changed. Same app, same flat fee, same brand. The single variable was how hard the casino was allowed to run. That is the cleanest natural experiment Indian finance has produced: tighten the F&O rules, and the largest broker's P&L deflates in exact proportion to its dependence on the segment.

The quietest marketing budget in finance

Here is the strangest line in the cost table, and the one that proves the product sells itself. Zerodha spent ₹47 crore on advertising in FY25 - about half of one percent of its revenue. For scale: the same filing shows 7.26 million users and a 15.8% market share on NSE's active client list. Seventy-two lakh customers, acquired essentially by word of mouth, while competitors bought IPL slots and influencer armies. The machine's largest dealer does not need to hunt for the crowd. The crowd's own losses, recycled into aspiration content and referral chains, deliver the crowd.

Where the money goes

The cost side of the filing is a portrait of how little the toll booth needs to run. Total costs in FY25 were ₹3,238 crore against ₹8,847 crore of revenue: ₹539 crore on salaries, ₹2,328 crore on fees and commissions - the pass-throughs to exchanges and the system - and, notably, ₹228 crore in remuneration to the three directors. A company of seventy-two lakh customers runs on a salary bill smaller than what a mid-size startup burns on a single funding round's marketing. The rest of the difference between revenue and cost becomes profit, tax - ₹1,395 crore paid in FY25 - and that mountain of cash. The whole operation is proof of how expensive it is to play and how cheap it is to deal.

The good dealer problem

Here is what makes Zerodha the hardest chapter in this file, and the most important. By every conventional measure it is the good dealer. No venture capital demanding growth at any cost. No dark-pattern advertising blitz - the company famously spends almost nothing on marketing. Free investor education through Varsity, genuinely good, used by lakhs. A founder who has publicly warned, for years, that nearly everyone who trades options loses money. If the industry had a conscience, it would look like Zerodha.

And yet: ₹8,847 crore of revenue, ~48% net margin, built on the order flow of a customer base whose own regulator says 91% of them lose money, in a segment where the founder himself has written that almost every brokerage's model depends on active options traders. The warning on the label is sincere. The revenue line depends on the warning being ignored. Both things are true at once, and the company is honest enough that it has said both things itself - the FY25 numbers simply put a price on the contradiction.

What the margin buys

The ₹4,237 crore of profit is not the scandal. The scandal is what it measures: the toll extracted from the order flow of the 91%, processed at near-zero marginal cost. Every option order costs the same to execute whether the customer is a crore-profit desk or a first-salary recruit from a B30 town losing ₹46,000 in year one - but the brokerage is the same too, and there are a lot more of the second kind. The margin is the crowd's losses, minus the professional winners' share, rendered as a P&L line. And the ₹22,679 crore cash pile is what fourteen years of that arithmetic looks like, stacked.

Zerodha did not build the casino. It built the cleanest, cheapest, most honest-feeling entrance to it - and that is precisely why it is the biggest dealer at the table.