Choice International Limited — Q2 FY26 earnings call

Call held 17 Oct 2025

Management summary

Choice International delivered a robust performance in Q2 FY26, characterized by strong growth in its core broking and distribution business and significant milestones in its new AMC venture. The company successfully received SEBI approval for its Mutual Fund business and is set to launch its first NFO in October 2025. While the NBFC segment saw slight NIM compression due to a shift toward secured lending, overall profitability remains high with a 33% YoY increase in H1 PAT, supported by disciplined execution and a growing physical branch network.

Highlights

  • Consolidated Revenue for Q2 FY26 reached ₹284 crores, a growth of 14% YoY

  • H1 FY26 Revenue stood at ₹522 crores, up 15% YoY

  • Q2 PAT reported at ₹56 crores (+22% YoY) with H1 PAT at ₹104 crores (+33% YoY)

  • EBITDA margins for Q2 improved to 34.84% with EBITDA at ₹99 crores

  • Broking & Distribution AUM grew 25% YoY to ₹57,600 crores; Wealth AUM surged 327% YoY to ₹4,807 crores

  • NBFC loan book reached ₹716 crores with a healthy NNPA of 2.79%

  • Advisory order book remains strong at ₹666 crores at the end of Q2

  • Investment Banking pipeline exceeds ₹7,000 crores with 27 active mandates

Key financials

  1. Revenue ₹284 Cr +14%YoY
  2. EBITDA Margin 34.8%
  3. PAT ₹56 Cr +22%YoY
  4. NNPA 2.8%
  5. Total Loan Book ₹716 Cr

What they filed

Q1 FY27: revenue up 31.9%, net profit up 27.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue247 209 253 235 274 +11%303 +45%307 +21%310 +32%
EBITDA76 60 96 83 89 +17%112 +87%116 +21%105 +27%
Net profit46 31 54 48 56 +22%66 +113%68 +26%61 +27%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue
₹283 Cr Total
  • Broking and Distribution ₹161 Cr 56.9%
  • Advisory ₹79 Cr 27.9%
  • NBFC ₹43 Cr 15.2%

Guidance & targets

Other

  • Branch Expansion Other · FY26 · High confidence 100
    We are very much on track to complete the 100 new branches target for this remaining half of the year. I mean the 100 total for this financial year.

    — Ayush Sharma, Head - Investor Relations

Margin

  • NBFC NIM Margin · medium term · Medium confidence 10% - 11%
    However, we are hopeful that we will be able to maintain 10% - 11% kind of NIM numbers in the medium term timelines.

    — Ayush Sharma, Head - Investor Relations

Volume

  • Gold ETF NFO Target Volume · Q3 FY26 · Medium confidence ₹200 crores
    As per the target of the Gold ETF, initially we are targeting at least around Rs. 200 Cr in NFO.

    — Ajay Kejriwal, Executive Director

Profitability

  • AMC Business Break-even Profitability · by FY28-29 · Medium confidence 2-3 years
    We expect not more than three years. In two to three years, we will come on the break even.

    — Ajay Kejriwal, Executive Director

Revenue

  • Investment Banking Pipeline Revenue · FY26 · Medium confidence >₹7,000 crores
    27 mandates are currently in progress with a tentative fundraising pipeline exceeding Rs. 7,000 Cr.

    — Arun Poddar, Group CEO

Risks & concerns

  • Concentration Risk in Corporate Insurance

    medium

    A single non-renewed contract caused a 31% YoY decline in the corporate insurance vertical.

    Analyst acknowledged

  • NIM Compression in NBFC

    low

    Shift from high-yield unsecured to lower-yield secured loans is reducing margins, though management targets 10-11% NIM.

    Both acknowledged

  • Regulatory Headwinds in Broking

    low

    Management believes their retail-cash focus insulates them from derivative-focused regulatory changes.

    Analyst downplayed

Areas of evasion (1)

  • Revenue per branch metrics were not readily available during the call.

Q&A highlights

3 direct
Decline in Corporate Insurance Vertical Direct
Corporate business is with limited number of clients and there has been one contract which we could not renew during the quarter because of which we have seen a decline.

Reveals concentration risk in the corporate insurance segment where a single contract loss led to a 31% YoY decline.

Asked by Urmish Shah

Impact of Regulatory Changes on Brokerage Direct
Specifically in retail, we have a higher cash contribution instead of derivatives contribution when we compare ourselves to the industry numbers, because of which we do not foresee a major impact of the regulatory changes.

Management clarifies that their business model is less reliant on the high-risk derivative segment currently under regulatory scrutiny.

Asked by Shreyansh

NBFC NIM Compression Direct
NIM has slightly dropped largely because we have not been doing the unsecured loans where higher rate of interest is earned. Largely, our focus is on the secured loan portfolio which has lower rate of interest.

Explains the margin pressure as a strategic shift toward lower-risk secured lending rather than competitive pricing pressure.

Asked by Urmish Shah

2 min read 5 chapters

Detailed narrative

Strategic Entry into Asset Management

Choice International has received final SEBI approval to operate as an AMC, marking a major expansion of its financial services ecosystem. The company plans to launch a Gold ETF NFO on October 24, 2025, with an initial target of ₹200 crores. This will be followed by a Silver ETF in Q4 and a mix of passive and active strategies in FY27. Management expects the AMC business to reach break-even within two to three years by leveraging its existing pan-India distribution network.

NBFC Pivot to Secured Lending

The NBFC segment, contributing 15% of total revenue, is intentionally shifting its focus toward secured loans to ensure better asset quality. This transition has led to a slight compression in Net Interest Margins (NIM) as the company moves away from high-interest unsecured products. Despite this, management remains confident in maintaining NIMs between 10% and 11% in the medium term. The total loan book stands at ₹716 crores, with the retail segment accounting for ₹536 crores and a stable NNPA of 2.79%.

Broking Business Resilience Amid Regulatory Shifts

The broking and distribution business remains the primary revenue driver, contributing 59% of total revenue. Management highlighted that their model is heavily skewed toward retail cash segments rather than derivatives, which they believe will protect them from recent regulatory changes affecting the industry. Total client AUM reached ₹57,600 crores, reflecting 25% YoY growth, while the number of Demat accounts grew by 29% to over 1.2 million.

Aggressive Physical Expansion Strategy

Choice is continuing its aggressive 'phygital' strategy, aiming to open 100 new branches by the end of FY26. In the first half of the year, 35 branches have already been opened, and management confirmed they are on track to meet the full-year target. This expansion is supported by their 'Choice Business Associate Network,' which now exceeds 63,000 partners, helping the company deepen its reach into semi-urban and rural India.

Advisory and Investment Banking Momentum

The advisory business contributed 26% of revenue this quarter, backed by a strong order book of ₹666 crores. Significant new mandates were secured in sectors like housing, agriculture, and urban planning, with revenue recognition expected over a 24-36 month cycle. Simultaneously, the investment banking division is seeing a surge in activity, with 12 IPOs completed so far and a pipeline of 27 mandates representing over ₹7,000 crores in potential fundraising.

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