Zerodha’s growth stalls; IT’s new deal model

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Zerodha's profit growth has slowed as its core broking business comes under pressure. This and more in today's ETtech Top 5.

Zerodha FY26 profit, revenue stay flat due to slowdown in core broking business

Zerodha's net profit barely increased in FY26, rising to Rs 4,283 crore year-on-year (YoY) from Rs 4,231 crore, while operating revenue stayed flat.

Founder Nithin Kamath, in his annual note published on Wednesday, said interest income from margin funding is now offsetting the decline in the core broking business.

Brokerage income fell 10.7% YoY to Rs 2,738 crore; net transaction charges dropped to zero from Rs 400 crore after exchanges withdrew rebates.Interest income of Rs 2,269 crore is now nearly as large as brokerage itself.The margin trading facility (MTF) book, launched only in December 2024, has reached Rs 9,000 crore and contributes about 10% of revenue.

Kamath said the MTF business is "scaring" him, noting clients have borrowed about Rs 6,000 crore, roughly a quarter of Zerodha's net worth.Groww closed FY26 with Rs 4,062 crore revenue and Rs 1,826 crore profit, its Q4 topline up 87.9%.Zerodha counters with assets under management, where it now leads on retail and HNI holdings alone.

Indian IT services firms are seeing more structured deals where acquisitions are combined with service contracts, as artificial intelligence (AI) reshapes outsourcing and clients look to exit captive operations, experts said.

Tata Consultancy Services (TCS) on Monday announced a $1.4-billion deal with automaker Porsche, including the $373 billion purchase of its IT arm, MHP.HCLTech acquired US insurer Guardian Life Insurance's India operations in July and signed a seven-year services contract.Wipro bought Mindsprint, Olam Group's IT arm, and secured an eight-year service agreement.Tech Mahindra and LTIMindtree also struck similar deals this year.

What's driving this: “Two factors are driving the current cycle. The first is China and its relentless export economy, which is causing European firms to retrench and restructure,” said Peter Bendor-Samuel, executive chairman of Everest Group.

The second is AI, which is prompting companies to rethink investments and, in some cases, exit service operations they owned, he said.

Indian IT firms reduced H-1B dependency in last five years: Nasscom

Indian technology companies have cut their reliance on H-1B visas over the past five years by investing $1.1 billion in the US to build its science, technology, engineering, and maths (STEM) talent pool, Nasscom said.

The initiatives have reached 2.9 million students and helped upskill over 255,000 employees, it added.

SoftBank mulls up to $20 billion bond sale for OpenAI financing

SoftBank Group is in talks with investment banks for a $10-20 billion bond offering to help refinance a loan for its investment in OpenAI, sources told Bloomberg.

The offering may be denominated in dollars and euros, and could come as early as September.The funds will be partly used to repay a $40 billion bridge loan it took earlier this year for its investment in the ChatGPT maker.