Detailed Narrative
Strong Financial Momentum and Margin Expansion
Choice International reported a 16% YoY revenue growth to ₹238 Cr in Q1 FY26, but the real story was the significant margin expansion. EBITDA grew by 49% YoY to ₹87 Cr, and PAT surged 50% to ₹48 Cr. This was driven by a 462 bps improvement in PAT margins to 20.16%, which management attributes to their digitized, tech-driven operations where opex does not scale linearly with revenue.
Broking and Wealth Management Scaling Rapidly
The broking and distribution business remains the core engine, contributing 60% of total revenue. Demat accounts grew 29% YoY to 11.5 lakh, while wealth products AUM saw an explosive 443% YoY growth to ₹4,769 Cr. Management highlighted that 85% of branch revenue currently comes from broking, but they are successfully cross-selling wealth products, which now account for 10-15% of branch revenue.
Advisory Segment: A High-Margin Growth Lever
The Advisory business contributed 24% of total revenue with a high PBT of ₹24 Cr on ₹60 Cr revenue. The order book stands at a robust ₹586 Cr, which management expects to execute over the next 24-36 months. Significant new wins include a ₹52.8 Cr World Bank-backed project in Maharashtra and digitization mandates in Bihar and Karnataka, reinforcing their leadership in public sector transformation.
NBFC Strategy and Asset Quality
The NBFC segment reported revenue of ₹39 Cr with a loan book of ₹745 Cr. The focus remains on MSME-focused Micro LAP (average ticket size ₹8-9 lakh at ~20% interest), rooftop solar, and vehicle financing. Asset quality remains stable with NNPA at 2.25%. Management plans to focus on the existing 75 NBFC branches this year to grow AUM before expanding to new states next year.
Strategic Entry into Asset Management
Choice is on the verge of launching its Asset Management business, having received in-principle approval from SEBI. Final approval is expected within a month, with the first fund launch planned before Diwali 2025. The initial focus will be exclusively on ETF funds, marking a strategic move to capture the growing passive investment market in India.