'We'll see another hit': Nithin Kamath flags revenue blow if weekly options are scrapped, but...

India’s largest retail stockbroker Zerodha is bracing for a fresh revenue hit as weekly options face potential regulatory curbs, and co-founder Nithin Kamath isn’t sugarcoating the fallout.

In a post on X, Kamath acknowledged that Zerodha will likely take another short-term revenue blow but he reinforced his long-held philosophy that long-term trust beats short-term earnings. 

“When you're building a business for the long term, focusing on quarterly or even annual growth is a poor metric,” he wrote.

The post comes a day after Kamath revealed in a 15th-anniversary blog that Zerodha may start charging for equity delivery trades for the first time — a massive shift from its zero-brokerage model. 

The move, Kamath says, is driven by a 40% drop in brokerage income, triggered by regulatory changes targeting high-volume derivatives trading.

“The time has finally come for the business to pivot,” he had written, highlighting that delivery charges could be necessary to sustain operations amid declining margins.

Zerodha’s revenue slide stems from multiple policy changes over the past year:

• A steep hike in securities transaction tax (STT) on options
• Restrictions on weekly contract expiries
• Scrapping of exchange fee rebates
• And a broader market fatigue, slowing trader activity

While Zerodha has traditionally thrived on high-frequency derivatives trading, the crackdown is now forcing a rethink of its model.

Kamath’s latest remarks underscore the firm’s balancing act — between evolving market rules and staying loyal to its customer-first ethos. “The more you focus on quarterly numbers, the higher the odds that you'll do things that are bad for your customers,” he said.