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    Choice Intl.

    CHOICEINGood
    Financial Services·22 Jul 2025
    Management Summary

    Choice International delivered a strong start to FY26 with significant margin expansion and robust growth across its diversified business model. The company is successfully scaling its physical presence in Tier 3 and 4 cities while maintaining high digital efficiency. Management is pivoting towards higher-margin advisory services and preparing for a strategic entry into the Asset Management business by Diwali 2025.

    Highlights

    8

    • Total Revenue reached ₹238 Cr, a growth of 16% YoY.

    • EBITDA stood at ₹87 Cr, reflecting a robust growth of 49% YoY with margins at 36.48%.

    • PAT increased by 50% YoY to ₹48 Cr, with PAT margins expanding by 462 bps to 20.16%.

    • Broking and Distribution segment contributed 60% of total revenue at ₹136 Cr.

    • Advisory segment order book reached ₹586 Cr, with ₹63.5 Cr in new wins this quarter.

    • Wealth products AUM grew significantly by 443% YoY to ₹4,769 Cr.

    • Branch network expanded to 208 locations, up from 149 a year ago.

    • NBFC loan book stood at ₹745 Cr with stable asset quality (NNPA at 2.25%).

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹238 Cr+16%YoY
    2. 02EBITDA Margin36.5%
    3. 03PAT₹48 Cr+50%YoY
    4. 04PAT Margin20.2%
    5. 05NNPA2.3%

    Segment breakdown

    • Broking and Distribution₹136 Cr57.9%
    • Advisory₹60 Cr25.5%
    • NBFC₹39 Cr16.6%
    Donut· Share of Revenue

    Guidance & targets

    4
    CategoryTargetPriority
    Revenue
    Consolidated Revenue Growth
    25% to 30%
    		High
    Revenue
    Advisory Order Book Execution
    ₹586 crores
    		High
    Other
    Mutual Fund Launch
    Launch first fund
    		High
    Margin
    Government Advisory Margins
    22% to 25%
    		Medium

    Risks & concerns

    4
    RiskSeverity

    Cyclicality of Investment Revenue

    Q1 is typically lower than Q4 due to tax planning cycles and year-end incentives. — Analyst acknowledged

    low

    Competitive Pressure in Broking

    Intense competition from discount brokers, though management believes regulatory changes are leveling the playing field. — Both acknowledged

    medium

    Government Receivable Management

    Management claims mission-mode projects (NHAI, Jal Jeevan) have fast-track payment timelines. — Analyst downplayed

    low

    Areas of Evasion(1)

    • Specific unit economics per branch were not disclosed beyond the break-even timeline.

    Q&A highlights

    3

    “This is a general trend in business because Q4 is always heavy because of various contests and various other business growth activities... So, it's a cyclical kind of thing.”

    Clarifies that the sequential dip is seasonal rather than a fundamental business slowdown.

    asked by Mandira from Invesco

    2 min read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.