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

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

Also in the letter:
■ SoftBank's OpenAI funding plan
■ ETtech Done Deals
■ PhysicsWallah's stock surge

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Nithin Kamath, founder, Zerodha

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.

What the numbers show:

• 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.

Also Read: Tech, AI, wealth management will be immediate priorities for Groww: CEO Lalit Keshre

The discomfort, and the gap:

• 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.

Also Read: Groww Q1 profit nearly doubles to Rs 735 crore; MTF, commodities gain share

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IT firms turn to bundled deals to weather AI deflation

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.

For instance:

• 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.

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

Masayoshi Son, CEO, SoftBank

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.

Details:

• 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.

Double click: The report added that the Japanese investor is looking at a 144A format for the first time in more than a decade. This is a mode of private placement that lets companies sell unregistered securities to large financial institutions without full public registration.

If this goes through, it would be SoftBank's second dalliance with the offshore bond market this year. It sold a combined $3.6 billion of bonds in dollars and euros in April.

Capex worries: The deal also brings forth worries about tech companies pouring trillions into AI. Multiple investors are deepening their pockets to invest in AI, despite growing credit risks and no clarity about payoffs.

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Agentic AI startup Runable raises $21 million from Susquehanna, Nexus Venture Partners

(L-R) Saksham Sarda and Umesh Kumar, founders, Runable

Agentic startup Runable has raised $21 million in a round co-led by Susquehanna Venture Capital and Nexus Venture Partners as it to looks to build an AI platform for small businesses

Round details: Existing investors Together Fund and Array VC also took part in the round.

Runable will use the funds to add more marketing channels, improve measurement, and enable its AI agents to spot and fix campaign issues independently.

Ringg AI raises $10 million in funding from Peak XV Partners, others

(L-R) Kali CV, Siddharth Shankar Tripathi and Utkarsh Shukla, founders, Ringg AI

Bengaluru-based enterprise voice AI startup Ringg AI has extended its Series A funding to $15 million, with Peak XV Partners leading the round.

More on the round:

• The round also saw participation from existing investors Arkam Ventures and Capital 2B.
• The company will use the funds to enhance its platform, expand AI agents across voice, WhatsApp and browsers, develop its own AI models and grow its enterprise business in India and overseas.
• Ringg AI had raised $5.5 million in the first tranche of the round in January this year.

ET had first reported on June 4 that Peak XV was leading a $10 million round in the startup.

Also Read: D2C kitchenware startup Curaa raises Rs 40 crore led by 3one4 Capital

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PhysicsWallah shares jump 5% after block deal worth Rs 550 crore

(L-R) Prateek Maheshwari and Alakh Pandey, founders, PhysicsWallah

PhysicsWallah rose about 5% on Wednesday on the bourses after roughly 4.67 crore shares, valued at about Rs 550 crore, changed hands in a block deal.

The shares were traded at Rs 117.7 each, about 3% below the previous close of Rs 121, before the scrip climbed to Rs 126.9.

Sharp recovery: The stock of the edtech company has recovered around 63% in less than six months from its March low of Rs 77.7.


The Alakh Pandey-led company listed at Rs 145 in November last year, a 33% premium over its IPO price, and soon reached a high of Rs 161.9 before falling more than 52% over the following months.

Financials: For Q1 FY27, PhysicsWallah's:

• Consolidated net loss narrowed to Rs 88.3 crore from Rs 127 crore a year earlier.
• Revenue increased 24% on-year to Rs 1,054 crore.
• Online-business revenue grew 33.2%, supporting better monetisation and profitability.