Strong and Consistent Revenue Growth:- Company has been posting Strong and Consistently upward trending revenue growth for the past 5-year. The year-on-year (Y-o-Y) growth in revenue in FY23 stands out at 37.7% whereas 5-Year CAGR Revenue Growth of the company stands at 190.1%
Healthy Sustainable Profit Margins:- The Y-o-Y EBITDA margin in FY23 stands at 56.5%. The 5-year average EBIT margin stands out at 59.0%
Steady & Growing Profitability:- The Y-o-Y profit growth of the company stands at 37.2% in FY23. The 5-year CAGR of profits stands at 175.5%
The Atmanirbhar Startup:- Company is a debt-free company and sustaining its operations through retained earnings. In FY23 the Debt to Equity stands at 0.0002
Odd One Out:- Zerodha is among very few startups which stands out in terms of not raising the funds from Investors but rather the complete control of the company is in the hands of founders. Founders owns 99.5% of the company
Investment Thesis:- Though Zerodha is clocking healthy and consistent profitability which has further garnered it a M.Cap to Sales multiple of 7.3x which is reasonable as compared to its listed peers like AngelOne, Groww and 5 Paise whose average multiple stands out at 5.8. The reasonable target price of the company shall be Rs 8,659
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