Whereas progress virtually flattened within the earlier fiscal ended March 2025 (FY25), Upstox expects income to double within the ongoing (FY26) and the following (FY27) monetary years, co-founder and CEO Ravi Kumar stated in an interview.
The sharp enchancment within the profitability of India’s fourth-largest dealer by purchasers in FY26 is pushed by a tighter concentrate on high-value, energetic merchants, which lifted the common income per energetic person (Arpu) and improved retention. “Our Arpu has gone up by over 40%, and we most likely have one of many industry-leading retention charges amongst high-value merchants of just about 90%.”
India’s on-line brokers grappled with the Securities and Alternate Board of India’s (Sebi’) and the finance ministry’s clampdown in opposition to speculative buying and selling in equities and derivatives. Since 2024, Sebi has tightened threat norms throughout derivatives buying and selling, elevating margins, curbing weekly choices expiries, limiting retail entry to high-risk merchandise, and remodeling dealer incentives to cut back extreme churn. The stress elevated additional after finance minister Nirmala Sitharaman elevated the securities transaction tax (STT) on derivatives trades within the Union Funds for 2026–27.
The fiscal ended March 2025 was a “pretty troublesome” yr for the broking {industry} as regulatory adjustments added repeated “velocity bumps” to progress, Kumar stated. The corporate’s progress stagnated in FY25, with income rising round 9% year-on-year to about ₹1,208 crore, sharply slower than the Covid surge.
Upstox, like different on-line brokers, has been shedding buying and selling volumes.
Kumar stated Sebi “usually does the fitting factor by placing these velocity bumps… It helps long-term, structurally talking.” And Upstox is now working on the idea that regulatory scrutiny on derivatives and energetic buying and selling will intensify relatively than reverse.
In FY26, the concentrate on high-Arpu customers has pushed up its working earnings and internet revenue. “Our Ebitda has grown by virtually 120% versus final yr. Our PAT is monitoring about 2.25x to 2.3x of final yr, and our PAT margins have actually expanded,” stated Kumar. In FY25, revenue stood at roughly ₹215 crore.
‘Regulators will likely be stricter’
Like many fintech corporations over the previous two years, Upstox goals to turn out to be a bigger full-stack monetary establishment. Aside from core broking, it’s exploring income streams inside insurance coverage, asset administration and lending.
Insurance coverage is at an early stage with no significant income contribution, however the firm is investing aggressively in management, distribution and product to scale the enterprise over the following 12–18 months, in response to Kumar.
Upstox has additionally utilized for an asset administration firm (AMC) and non-bank monetary companies firm (NBFC) licence. Lending is a long-term possibility relatively than an pressing progress lever, Kumar stated. “It’s not one thing we’re in a brilliant rush to finish… however we expect it is sensible to have.”
The corporate can be banking on Sebi’s choice to permit algo buying and selling for retail traders from April this yr. “It’s a vital inflection level,” he stated.
Upstox is investing in backend infrastructure for high-uptime, low-latency programmatic buying and selling. “We’ve spun up new groups… a few of our most elite persons are constructing in the direction of this.”
In the meantime, sure different experiments have begun to bear fruit, in response to him. “Our common each day turnover in commodities has gone up over 2x, and income has grown by virtually 100%,” he stated.
Equally, its margin commerce facility has seen over a twofold improve in turnover year-on-year. Upstox’s systematic funding plan (SIP) platform quantity has grown over 35% prior to now yr, he stated.
Hedging bets
Upstox isn’t alone. In its latest earnings name, rival Groww additionally indicated that regulatory adjustments in derivatives and weaker market circumstances have begun to weigh on enterprise.
Previously 12 to 18 months, the market hasn’t been that nice and the brand new investor acquisition on the {industry} degree has really slowed down, stated India’s largest dealer by consumer base.
Market cycles, adjustments in retail investor behaviour, and the potential for extended regulatory scrutiny extending to different broking areas are its threat components, Kotak Securities stated in its January analyst report on Groww.
The dealer has stated that diversification is turning into central to its technique, noting that “all the brand new companies are rising sooner than the present enterprise.”
Brokerage Dhan can be seeking to diversify into segments like insurance coverage as regulatory adjustments hit buying and selling volumes, Mint reported in October.
No plan to boost funds
Based in 2009 as a proprietary buying and selling agency by Kumar, Raghu Kumar, and Shrinivas Viswanath, Upstox pivoted to retail broking in 2012. It provides instruments constructed particularly for critical, high-frequency and choices merchants.
“Our start line has all the time been the dealer, as a result of that’s the place we come from,” Kumar stated.
The corporate, which has raised about $220 million from traders corresponding to Tiger World Administration and Kalaari Capital, was valued at $3.5 billion in 2021.
In 2024, the broking agency repurchased 5% from Ratan Tata, an early angel investor, yielding a 10x return on his unique funding as realised capital.
Whereas the corporate plans to bolster the brand new streams of income, Kumar stated there’s “no want for us to boost any type of major funding proper now”.
A public itemizing stays on playing cards, however Upstox hasn’t disclosed the itemizing timeline. Kumar stated remaining personal provides Upstox the pliability to experiment with new enterprise traces with out short-term market stress.
The corporate’s rivals have been actively elevating exterior funding for progress. Groww raised near $1 billion in complete funding throughout its pre-initial public providing (IPO) and public itemizing that concluded final yr.
In October, inventory buying and selling platform Dhan raised $120 million in a spherical led by Hornbill Capital, MUFG Financial institution.