Choice International Limited — Q4 FY26 earnings call

Call held 24 Apr 2026

Management summary

Choice International Limited delivered a strong Q4 and FY26, with consolidated revenue growing 24% YoY to Rs. 1,145 Cr and PAT increasing 46% YoY to Rs. 238 Cr for the full year. The company saw robust growth in its broking and distribution segment, with stockbroking AUM up 28% YoY, and its advisory business secured a healthy order book of Rs. 698 Cr. While overall wealth AUM saw a decline driven by debt mutual fund redemptions, equity MF AUM grew significantly, and the company is focusing on leveraging technology for margin expansion and maintaining a 30% YoY growth trajectory.

Highlights

  • Consolidated Revenue for FY26 grew 24% YoY to Rs. 1,145 Cr, demonstrating strong top-line performance.

  • Consolidated PAT for FY26 surged 46% YoY to Rs. 238 Cr, indicating significant profitability improvement.

  • Q4 FY26 PAT increased 27% YoY to Rs. 68 Cr, reflecting continued strong quarterly earnings.

  • Stockbroking AUM expanded 28% YoY to Rs. 52,482 Cr in Q4 FY26, highlighting robust growth in core broking activities.

  • The advisory business secured an order book of Rs. 698 Cr, providing clear revenue visibility for the next two to three years.

Concerns

  • Overall wealth product AUM declined 23%, primarily driven by redemptions in debt mutual funds, despite a 35% growth in equity MF AUM.

  • The NBFC segment reported GNPA of 2.74% and NNPA of 1.86%, with an analyst noting a slight increase, though management stated normalization in Q4 FY26.

  • The advisory segment's order book saw a QoQ decline in Q4 FY26 due to project execution, raising questions about immediate pipeline replenishment, despite management's strong outlook.

Key financials

2 periods

Q4 FY26

  • Consolidated Revenue
    ₹314 Cr
    YoY +23%
  • Consolidated PAT
    ₹68 Cr
    YoY +27%
  • Consolidated EBITDA Margin
    39.1%

FY26

  • Consolidated Revenue
    ₹1,145 Cr
    YoY +24%
  • Consolidated PAT
    ₹238 Cr
    YoY +46%
  • Consolidated EBITDA Margin
    37%

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

SegmentQ4 FY26 RevenueQ4 FY26 PBT
Broking & Distribution₹179 Cr₹55 Cr
NBFC₹43 Cr₹2 Cr
Advisory₹91 Cr₹31 Cr
Insurance——

Capital allocation

high confidence
  • Liquidity Liquidity disclosed Management stated that there are enough internal accruals to support all businesses and that the hold-co is sufficiently capable to support any growth capital required.
    On the capital aspect, we have the enough internal accruals as well to support all businesses. Although all of our businesses are self-sufficient now, they don't need much of the capital. However, as far as the growth capital is required, the hold-co is sufficiently capable to support any of the business required.

Guidance & targets

Overall Growth

  • Revenue and Profitability YoY Growth Overall Growth · medium-term · High confidence around 30%
    We have been constantly communicating as well as projecting internally to maintain a growth rate of around 30% on YoY basis across revenues and profitability.

    — Ayush Sharma

Asset Management

  • AUM Asset Management · FY27 · High confidence Rs. 1,000 Cr
    Okay. Our one-year target in the AMC business, is to reach at Rs. 1,000 Cr of AUM at the close of FY27.

    — Ayush Sharma

Insurance Distribution

  • Corporate vs. Retail Mix Insurance Distribution · future · High confidence 50-50
    Okay. On the insurance side, we plan to keep 50-50 mix between corporate and retail in future as well.

    — Ayush Sharma

IPPB Partnership

  • Revenue Generation Start Date IPPB Partnership · this quarter · High confidence July 1st
    Currently the tech integration is going on and we'll go live in this quarter. We expect that from 1st of July, we will start having revenues in our balance sheet and the profitability will start coming in.

    — Ayush Sharma

Revenue Mix

  • Broking & Distribution Share Revenue Mix · next three years · High confidence 50%
    We expect all of them to grow at a faster pace and the mix will remain somewhere between, 50-40-10 kind of ratios. 50% for broking and distribution, 40% for advisory, and 10% for the NBFC.

    — Ayush Sharma

  • Advisory Share Revenue Mix · next three years · High confidence 40%

    — Ayush Sharma

  • NBFC Share Revenue Mix · next three years · High confidence 10%

    — Ayush Sharma

What to watch in Q1 FY27

IPPB Partnership Revenue Contribution

next quarter
Current Tech integration ongoing, no revenues yet
Target Revenues starting from July 1st

Why it matters

This new partnership is expected to be a significant revenue stream with negligible customer acquisition cost, validating the company's digital reach strategy.

Currently the tech integration is going on and we'll go live in this quarter. We expect that from 1st of July, we will start having revenues in our balance sheet and the profitability will start coming in.

Risks & concerns

  • Wealth AUM Decline due to Debt MF Redemptions

    medium

    Overall wealth AUM declined 23% due to redemptions in debt mutual funds, though equity MF AUM grew 35%.

    Analyst acknowledged

  • NBFC Asset Quality (NPA increase)

    medium

    Analyst noted a 1-3 bps increase in NPA, but management stated that the rise seen earlier in the microfinance segment is now normalizing in Q4 FY26, with GNPA at 2.74% and NNPA at 1.86%.

    Analyst downplayed

  • Advisory Order Book Volatility

    medium

    The advisory segment's order book declined QoQ in Q4 FY26 due to execution, but management emphasized a strong pipeline and expectation of securing more contracts.

    Analyst downplayed

  • Advisory Concentration

    low

    High contribution from specific states and sectors (e.g., Maharashtra, infra consulting) in the advisory business, but management is focused on expanding to other states to diversify.

    Analyst acknowledged

Q&A highlights

7 direct
Wealth AUM Decline Direct
If you see, there is a decline in overall AUM, however, there is a growth of 35% in the equity MF AUM. The decline is largely driven by redemptions in the debt mutual funds, which is natural because of the market sentiment wherein people withdraw their excess capital deployed in debt and tend to invest in equities at a better price.

Clarified the reason for overall AUM decline, distinguishing between debt and equity mutual funds and highlighting the company's focus on higher-margin equity AUM.

Asked by Urmish Shah

NBFC NPA Trend and Normalization Direct
On the asset quality side, you can see a growth in the overall YoY numbers. However, during the year there has been certain rise in the NPA numbers, which has come down in Q4 FY26. This rise was largely driven by the overall economic impacts which we had seen in the microfinance segment, but now things seem to be normalizing starting this quarter.

Addressed concerns about a slight NPA increase, attributing it to microfinance segment impacts that are now normalizing, providing context for asset quality.

Asked by Urmish Shah

Net Margin Expansion Levers Direct
However, to expand the margins further, the larger use of tech is going to play a role as we achieve the higher scales. Our fixed costs are not going to increase. As seen in the Q4 performance, the revenues have grown by 23%, but the profit has grown by 46% for FY26.

Provided specific strategy for future margin expansion, emphasizing technology leverage and stable fixed costs, linking it to recent performance.

Asked by Shweta Sharma

IPPB Partnership Unit Economics Direct
Now in this case, as your question is on the size of the SIP and assumptions on the low income category, I would like to clarify here that the partnership is with India Post Payments Bank and not the post office. So, although Post Payments Bank leverage the distribution platform distribution channels which is created by the post office, but the customers which are there on the India Post Payments Bank have are not the same customers as of the post office. They have a higher investment capability because normally people tend to invest in the post offices in terms of recurring deposits model.

Clarified the target customer segment for the IPPB partnership, indicating higher investment capability and expected SIP ticket sizes, which is crucial for understanding the revenue potential.

Asked by Rohan Mehta

Advisory Segment Order Book Decline Direct
There isn't any slowdown in the business per se. Being Q4, the larger target was on executing the projects and completing this, within this the previous financial year itself and that is why you see a decline in this quarter for the first time. Until now, you must have seen the growth in the overall order book only. As the orders are executed, you could see a decline, but in this quarter, we are very confident and the pipelines looks very strong and we will get more contracts which will enable us to grow the order book, compared to the previous quarter as well.

Addressed concerns about a QoQ decline in the advisory order book, explaining it as a result of execution rather than a slowdown in new mandates, and reiterated a strong pipeline.

Asked by Rohan Mehta

Advisory Concentration Risk Direct
Of course the contribution of these states and sectors are high, but we don't see a major risk immediate risk of this concentration. However, the focus of the management is definitely to expand to other states as well. The others which you see in the earnings presentation includes 22 other states where we have the current orders live and where we are expanding our businesses as well. So, as the other states grow, this contribution will come down.

Acknowledged concentration risk in the advisory segment but outlined a strategy to diversify by expanding to other states, providing a mitigation plan.

Asked by Rohan Mehta

AI Implementation and Differentiation Direct
In our case, as I mentioned that analytics is the larger part which we are doing for the broking business also. Take an example; that now Al decides that which customer should get which notification at what time; so that he gets the right information at the right time. So, these are the kind of activities which we have piloted with the use of AI and will be implementing in the due course as the models mature.

Provided specific examples of AI application in the broking business, demonstrating how technology is being used for customer engagement and differentiation.

Asked by Ramesh Thorani

Demerger Plans Partial
Not immediately. Of course, the value unlock will be one of the target, but there are there are no immediate plans to do so.

Addressed a strategic question about potential demergers, indicating it's a long-term goal for value unlock but not an immediate plan, providing clarity on capital structure strategy.

Asked by Ramesh Thorani

3 min read 8 chapters

Detailed narrative

Strong Financial Performance in FY26

Choice International Limited reported robust financial results for FY26, with consolidated revenue reaching Rs. 1,145 Cr, marking a 24% year-on-year growth. Profit after tax (PAT) for the full year surged 46% YoY to Rs. 238 Cr, reflecting improved operating efficiency with an EBITDA margin of 37%. For Q4 FY26, consolidated revenue grew 23% YoY to Rs. 314 Cr, and PAT increased 27% YoY to Rs. 68 Cr, with an EBITDA margin of 39.08%.

Broking & Distribution Segment Momentum

The broking and distribution segment was a key growth driver, contributing 59% to total revenue in Q4 FY26 with a PBT of Rs. 55 Cr. Stockbroking AUM grew significantly by 28% YoY to Rs. 52,482 Cr in Q4 FY26. The company's Demat account base expanded to 13 lakhs, representing a 16% YoY increase, supported by enhanced onboarding processes and a wider product offering.

Advisory Business Strength and Pipeline

The advisory segment demonstrated strong performance, reporting FY26 revenue of Rs. 330 Cr and PBT of Rs. 120 Cr. The segment currently holds a healthy order book of Rs. 698 Cr, providing revenue visibility for the next two to three years. While the Q4 order book saw a QoQ decline due to active project execution, management emphasized a strong pipeline and confidence in securing more contracts, including bids for projects exceeding Rs. 400 Cr.

NBFC Segment Focus on Secured Lending

The NBFC segment continued its strategic focus on secured lending, particularly in MSME, micro-LAP, and rooftop solar financing. The loan book stood at Rs. 800 Cr as of FY26, contributing 13% to total revenue. Asset quality remained stable, with a Gross Non-Performing Asset (GNPA) ratio of 2.74% and a Net Non-Performing Asset (NNPA) ratio of 1.86% as of March 31, 2026, with net interest margins at 11.22%.

Strategic Partnerships and Digital Reach

Choice secured a significant digital investment platform mandate from India Post Payments Bank (IPPB), which is expected to provide access to a large distribution network and enable cross-selling with negligible customer acquisition costs. The company highlighted its strong digital adoption, with approximately 70% of its revenue generated through digital channels, including its mobile app and web trading platform, reflecting its tech-driven approach.

Asset Management and Insurance Growth

In asset management, Choice expanded its product offerings by launching the Choice Nifty 50 Index Fund and Choice Nifty Next 50 Index Fund, targeting an AUM of Rs. 1,000 Cr by FY27. The insurance business experienced consistent growth, driven by a broader partner network and increased use of digital platforms, with Q4 FY26 premium collection reaching Rs. 84 Cr, a 14% YoY increase, and policy volumes at 50,887.

Technology-Driven Margin Expansion and AI Initiatives

Management articulated that leveraging technology for higher scales and maintaining stable fixed costs would be key to expanding net margins over the next 2-3 years, as evidenced by Q4 profit growth outpacing revenue growth. The company has a dedicated team for AI implementation across all business verticals, focusing on data analytics and customer-facing activities like personalized notifications to enhance customer engagement and operational efficiency.

Capital Allocation and Future Strategic Outlook

The company confirmed it possesses sufficient internal accruals to support the growth of all its businesses, which are largely self-sufficient in capital. While value unlock remains a long-term target, there are no immediate plans for demerger. Choice aims to maintain a 30% YoY growth in revenue and profitability, with a future revenue mix targeting 50% from broking & distribution, 40% from advisory, and 10% from NBFC.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Financial Services earnings calls