India's fintech industry has entered a new phase of profitability, with wealthtech emerging as the sector's biggest earnings engine, according to a report by institutional brokerage firm Jefferies India Pvt. Ltd.
FY25 marked "the sector's first year of profit," with aggregate profit after tax projected to rise to ₹43,000 crore by FY30 from ₹2,300 crore currently, Jefferies said in a report published on Tuesday.
Payments generated ₹51,200 crore of the fintech industry's ₹1.03 trillion in FY25 revenue, but posted an aggregate loss of ₹5,300 crore, with adjusted Ebitda of just ₹400 crore, it said.
Meanwhile, wealthtech, which generated ₹22,600 crore in revenue, clocked ₹10,400 crore in adjusted Ebitda and ₹7,400 crore in profit after tax. This is well over half the industry's total Ebitda pool of ₹16,600 crore, and more than three times its aggregate PAT of ₹2,300 crore.
"While the payment segment leads revenue share, wealthtech leads profit pools," said the report accessed by Mint.
Wealthtech's ₹7,400 crore profit was largely offset by losses elsewhere in the industry—payments lost ₹5,300 crore, neobanks ₹500 crore, SaaS and others ₹500 crore, and insurtech ₹100 crore—leaving the fintech industry's aggregate PAT at just ₹2,300 crore despite wealthtech's outsized contribution, per Jefferies data.
The Jefferies report profiles 56 Indian fintech companies across payments, wealthtech, lendtech, insurtech, neobanks and SaaS. It pegged the aggregate FY25 revenue of the fintechs it covers at ₹1.03 trillion, and adjusted Ebitda at ₹16,600 crore, and valued the coverage universe at ₹9.95 trillion—more than $100 billion. Companies referenced include Paytm, PB Fintech (PolicyBazaar), Groww, Angel One and Zerodha, alongside CRED, BharatPe, DMI Finance, Acko and Zeta.
Groww, Zerodha, Angel One, PB Fintech and Paytm were among the largest generators of adjusted Ebitda in FY25, the report noted, while Groww, Zerodha, PB Fintech, Dhan and Oxyzo led on profit. To be sure, the report presents data as of 31 March 2025 and does not reflect changes in FY26.
"The wealthtech side of broking has done very well driven by the capital markets boom and the SIP boom," Akshay Gupta, director of Prime Securities, told Mint.
Wealthtech companies such as Groww, Zerodha and Angel One have benefited from rising retail participation in Indian capital markets and growing SIP inflows.
Wealthtech's edge traces to its brokerage-led model. Groww, India's largest broker by active clients with a 26% market share, earns through brokerage on trades and distribution commissions, Jefferies said, while Zerodha earns primarily from futures and options trading, with growing diversification into asset management, lending and insurance.
"Once these platforms have acquired customers, there is significant inertia in moving to another platform. Today, large brokers are becoming NBFCs themselves and are offering products such as margin trading facilities, loans against shares, loans against mutual funds and loans against bonds. That's where the next layer of monetisation is coming from," Gupta said.
"The payments segment continues to see losses even though it has reduced from highs," the report added.
Jefferies said the Indian fintech industry's revenue pool "grew at 49% compound annual growth rate over FY21-25," with growth "higher in insurtech and lendtech segments," but slower in payments. It linked the faster growth in insurtech and lending to "strong capital market trends with retail participation, flows into SIPs," and rising derivatives trading, while slower payments growth reflected "lower take rates, intense competition and impact of regulatory actions on leading platforms like Paytm."
Fintech growth outlook
Looking ahead, Jefferies expects India's fintech industry revenue to grow at roughly an 18% CAGR between FY25 and FY30, down sharply from FY21-25 levels, with wealthtech's active-client base growth also cooling, from 64% to 14% CAGR. "We expect growth normalizes to healthy levels of 15-27%, with Insurtech & Payments leading," Jefferies said, adding that those unable to monetise customers further "may be forced to consolidate or merge."
The brokerage flagged FY27 as "likely to be a year of reset of earnings, due to new regulations" on incentives, even as it expects fintechs to "push revenue growth and capitalize on scale for profit" thereafter.
Regulatory tightening is one driver: the RBI has withdrawn UPI incentive schemes and curbed credit-card use for rent and education payments, Jefferies said.
Wealthtech carries its own risk: the segment "may also be at risk if Securities and Exchange Board of India (Sebi) tightens norms on index options derivatives," which could hit transaction revenue and float income, the report said.
Even so, Jefferies expects cross-selling of loans against securities, margin-trade funding, and personal loans to support a 29% CAGR in wealthtech revenue and a 36% CAGR in profit over FY26-28 for well-placed players such as Groww.
Jefferies said Indian fintech valuations are increasingly aligning with profitability. Payments and wealthtech account for the largest share of the sector's value, followed by lendtech and insuretech.
Large listed stocks such as Paytm and PB Fintech "corrected by 50-60% within six months of listing" and have since re-rated as profit pools rose, the report said, while unlisted players have also seen valuation haircuts, "reflecting realism in the outlook on growth & valuation levels."