Choice International Limited — Q4 FY25 earnings call

Call held 23 Apr 2025

Management summary

Choice International delivered a strong performance in its maiden earnings call, characterized by robust growth across its three core verticals: Broking, NBFC, and Advisory. The company is aggressively pursuing a 'phygital' strategy, expanding its physical footprint into Tier 3 cities while leveraging in-house technology. Strategic acquisitions in the wealth management and lending spaces have significantly boosted AUM and loan books, setting a high growth trajectory for FY26.

Highlights

  • Full year FY25 revenue reached ₹921.70 crores, representing a 21% YoY growth.

  • Q4 FY25 EBITDA stood at ₹98.30 crores, a significant 42% YoY increase with margins expanding to 38.54%.

  • Full year PAT grew 24% YoY to ₹162.70 crores, with Q4 PAT rising 36% to ₹53.5 crores.

  • Wealth Product Distribution AUM surged 793% YoY to ₹5,500+ crores, aided by the Arete Capital acquisition.

  • NBFC loan book reached ₹768 crores with a healthy NNPA of 0.83% and CRAR of 38.62%.

  • Advisory business maintains a robust order book of ₹500+ crores, primarily focused on government infrastructure projects.

  • Branch network expanded to 192 offices, with a target to add 100 more in FY26.

Key financials

  1. Revenue ₹921.7 Cr +21%YoY
  2. EBITDA Margin 32.1%
  3. PAT ₹162.7 Cr +24%YoY
  4. GNPA 2.5%
  5. NNPA 0.83%
  6. CRAR 38.6%

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
₹916.3 Cr Total
  • Broking and Distribution ₹551.2 Cr 60.2%
  • Advisory ₹250.3 Cr 27.3%
  • NBFC (Choice Finserv) ₹114.8 Cr 12.5%

Guidance & targets

Revenue

  • NBFC Business Growth CAGR Revenue · next couple of years · Medium confidence 25-30%
    So, you can expect a growth of somewhere around 25% to 30% CAGR in the NBFC business over the couple of years.

    — Ayush Sharma, Head Investor Relations

  • Broking Business Growth CAGR Revenue · next couple of years · Medium confidence 30-35%
    But at the same time, in the broking business we are expecting to grow at 30% to 35% kind of CAGR over the next couple of years.

    — Ayush Sharma, Head Investor Relations

Headcount

  • Branch Network Expansion Headcount · FY26 · High confidence 100 branches
    For the upcoming financial year, we are planning to expand our branch network further by another 100 branches.

    — Ayush Sharma, Head Investor Relations

Other

  • District Presence Other · next 5 years · Medium confidence 800 districts
    On a longer term basis, if we have to take a five-year plan, we are planning to have our own branch office at almost all districts, which are roughly around 800 districts across India.

    — Ayush Sharma, Head Investor Relations

Risks & concerns

  • Asset Quality in NBFC

    medium

    GNPA stands at 2.49%; management highlighted a robust underwriting process and a shift toward prime borrowers to mitigate risk.

    Analyst acknowledged

  • Market Volatility Impact

    medium

    Broking and wealth businesses are sensitive to market cycles, though management claims the Advisory vertical provides a macroeconomic hedge.

    Analyst acknowledged

  • Integration of Acquisitions

    low

    Recent growth is heavily reliant on integrating Paisabuddy, Sureworth, and Arete Capital successfully.

    Management acknowledged

Q&A highlights

3 direct
Competitive Moat vs Digital-First Peers Direct
We largely focus on the physical infrastructure. We largely focus on the customers who are into semi urban... we prioritize the handholding of customers across their whole financial services journey.

Clarifies Choice's strategy of using physical presence in Tier 3 cities to differentiate from pure-play digital brokers like Angel One.

Asked by Shubham Poruhit, SBI Securities

NBFC Growth Drivers and Yields Direct
In Q3 FY25, we had acquired a retail lending business of Paisabuddy... and a distribution business of Sureworth... this transition has led to a significant jump into the AUM... yield amounts to roughly around 20.5% to 21%.

Explains the sudden jump in NBFC books as inorganic and provides high-yield data points for the lending segment.

Asked by Raman KV, Sequent Investments

Mutual Fund Launch Timeline Direct
Usually, it takes 6 months time for SEBI to give the final approval after the in-principle approval... To begin with, we will be coming up with the ETF.

Provides a concrete timeline (approx. mid-FY26) for the launch of their AMC business and the initial product strategy.

Asked by Hina Parekh, Finvest First Advisors

2 min read 5 chapters

Detailed narrative

Strategic Pivot to 'Phygital' Expansion

Choice International is aggressively expanding its physical footprint, moving from 115 to 192 branches in FY25. Management plans to add another 100 branches in FY26, with a long-term goal of covering all 800 districts in India within five years. This strategy targets the 'new entrants' in financial services from Tier 3 and below geographies who prefer physical handholding over pure digital interfaces.

Inorganic Growth Bolsters NBFC and Wealth Segments

The company's growth in FY25 was significantly accelerated by strategic acquisitions. The acquisition of Arete Capital increased Wealth AUM nearly 5-fold to ₹5,500+ crores. Similarly, the slump sale acquisitions of Paisabuddy and Sureworth drove a 53% jump in the NBFC loan book, which now stands at ₹768 crores with a consolidated yield of 20.5% to 21%.

Advisory Vertical as a Macroeconomic Hedge

The Advisory business, contributing 26% of total revenue, serves as a stabilizer during market volatility. With an order book of ₹500+ crores focused on government missions like the Jal Jeevan Mission, this segment provides predictable revenue streams. Management noted that 60-65% of the current order book is tied to water-related infrastructure projects across 10 states.

Asset Management Entry on the Horizon

Following in-principle approval from SEBI in December, Choice has applied for final approval to launch its Mutual Fund business. The company expects to begin operations within six months, initially focusing on Exchange Traded Funds (ETFs). This move aims to complete their financial services ecosystem, allowing them to cross-sell products to their 10 lakh+ Demat account holders.

Insurance Distribution Scaling Rapidly

The insurance arm sold over 52,000 policies in Q4 FY25 alone, generating ₹93 crores in premium. The company is leveraging a POSP (Point of Sale Person) model with 7,300 registered partners to drive growth. Management expects insurance to eventually become a standalone reporting segment as it continues to scale through retail and corporate cross-selling.

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