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.