CHOICEIN - Choice Intl.

📊 NSE: CHOICEIN 🏢 Finance & Investments 📅 Last Updated: 12/13/2025 21:04

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for Q2 FY26 reached INR 284 Cr, a 14% YoY increase. The Broking and Distribution segment is the primary driver, contributing 59% of total revenue. The Advisory business contributed 26% of total revenue in Q2 FY26. Insurance premium generated grew 49% YoY to INR 929 Mn, while Wealth Products AUM saw a massive 793% YoY surge to INR 55,774 Mn.

Geographic Revenue Split

The company has a deep presence in 'Bharat' with a distribution footprint of 41% in rural areas, 25% in semi-urban areas, and 34% in urban locations. This wide reach across Tier 3 and below geographies allows for lower client acquisition costs through local trust.

Profitability Margins

PAT for Q2 FY26 was INR 56 Cr, representing a PAT margin of 19.87%, which is a 22% YoY growth. For H1 FY26, PAT reached INR 104 Cr with a margin of 20.01%. The improvement is driven by increased cross-sell activity and digital issuance capabilities reducing operational overhead.

EBITDA Margin

EBITDA margin for Q2 FY26 improved to 34.84% (INR 99 Cr) compared to 31.16% in Q2 FY25. This 368 bps expansion is attributed to operational efficiencies gained through the in-house technology backbone, Choice Techlab, and a focus on high-margin retail segments.

Capital Expenditure

Promoters intend to infuse ~INR 100 Cr at the holding company (CIL) level to support growth in lending and key businesses. INR 25 Cr was infused as share application money in FY20, with the remaining ~INR 75 Cr expected within 12 months of the reporting period.

Credit Rating & Borrowing

Brickwork Ratings (BWR) assigned a 'BWR BBB-/Stable' rating for bank facilities totaling INR 14.25 Cr. Finance costs for Q2 FY26 were INR 20.60 Cr, up 36.8% YoY, reflecting increased borrowing to fund the growing NBFC loan book.

⚙️ Operational Drivers

Raw Materials

As a financial services firm, the primary 'inputs' are human capital (200+ engineers in Techlab) and cost of funds (Finance costs of INR 20.60 Cr representing 7.2% of total income).

Import Sources

Not applicable as the company provides financial services; however, technology infrastructure is managed by an in-house team of 200+ specialists in India.

Key Suppliers

Not applicable; the company operates as a service provider using internal technology (Choice Techlab) and a network of 63,244 Choice Business Associates (CBAs).

Capacity Expansion

The company operates 211 branches and 49 project offices. The CBA network expanded 50x from 2019 to 2025, reaching 63,244 associates. The NBFC arm, Choice Finserv, grew its AUM by 59.35% YoY to INR 767.94 Cr.

Raw Material Costs

Employee benefit expenses, a key operational cost, stood at INR 77.22 Cr in Q2 FY26, representing 27.2% of total income, up 11% YoY to support the expanding advisory and tech teams.

Manufacturing Efficiency

Annualized employee productivity in the insurance retail business was INR 11.69 Mn per employee in Q2 FY26. Digital issuance capabilities have streamlined the insurance sourcing process.

Logistics & Distribution

Distribution is handled digitally via the 'Choice Connect' platform and 'Choice FinX' app, minimizing physical logistics costs while reaching 1,086K demat accounts.

📈 Strategic Growth

Expected Growth Rate

15-20%

Growth Strategy

Growth will be driven by the launch of Choice Mutual Fund following SEBI approval, a robust IPO pipeline of 27 mandates (INR 7,000 Cr+), and deepening penetration in Tier 3 markets via the CBA network. The company is also expanding into micro-loans and micro-insurance to target lower-income households.

Products & Services

Equity broking, mutual funds, wealth management, insurance policies (motor, health, life), MSME loans, and investment banking advisory (IPOs, Rights Issues).

Brand Portfolio

Choice FinX (Super App), Choice Money (Lending), Choice Connect (Distribution), Choice Techlab (Technology), Choice Business Associates (CBA).

New Products/Services

Choice Mutual Fund (AMC) recently received SEBI approval. New lending products like micro-loans and recurring deposits are being explored for the Bharat market.

Market Expansion

Targeting 'Bharat' (Tier 3 and below) with a physical presence on the ground. The company plans to execute a growing number of Mainboard and SME IPOs in FY26.

Market Share & Ranking

Retail ADTO market share stood at 1.21% in Q4 FY25. The company is an industry leader in Tier 3 geographies with 1,086K demat accounts.

Strategic Alliances

The company operates through various subsidiaries including Choice Equity Broking (90%), Choice Finserv (82.34%), and Choice Consultancy Services (90%).

🌍 External Factors

Industry Trends

The industry is seeing gradual consolidation due to tightened regulations and higher compliance costs. There is a structural shift toward digital, agent-led distribution in semi-urban and rural India, where Choice has a 66% footprint (Rural + Semi-urban).

Competitive Landscape

Competes with traditional brokers and new-age fintechs. Choice differentiates by combining a physical branch network (211 branches) with a digital 'Super App' (Choice FinX).

Competitive Moat

The primary moat is the 'Choice Connect' network of 63,000+ local advisors which creates a 'last-mile trust' that pure digital players lack. This network is difficult to replicate and drives a 25% YoY growth in client assets (INR 57,600 Cr).

Macro Economic Sensitivity

Highly sensitive to Indian capital market cycles and IPO sentiment. A positive outlook for the Indian IPO market (projected >INR 2 trillion in FY26) directly benefits the Investment Banking pipeline.

Consumer Behavior

Increasing financial literacy and disposable income among young clients (53% of clients are aged 35 & below) is driving retail participation in equity and wealth products.

Geopolitical Risks

Minimal direct impact as operations are domestic, though global FII sentiment affects the broader capital markets where Choice operates.

⚖️ Regulatory & Governance

Industry Regulations

Subject to SEBI regulations for broking and AMC, and RBI regulations for the NBFC (Choice Finserv). Management notes that recent SEBI derivative regulatory changes have limited impact due to their retail cash focus.

Environmental Compliance

Not applicable for financial services; however, the company has a CSR Committee and two 'Choice Green Energy' subsidiaries (MH-1 and MH-2).

Taxation Policy Impact

Tax expenses for Q2 FY26 were INR 17.95 Cr, representing an effective tax rate of approximately 24.1% of PBT (INR 74.41 Cr).

⚠️ Risk Analysis

Key Uncertainties

Market volatility affecting the INR 7,000 Cr IPO pipeline; regulatory shifts in the broking industry; and the ability to maintain asset quality (NNPA currently at 2.79%) in the MSME lending book.