Stonegate Capital Partners has recently initiated coverage on Choice International Ltd. (NSE: CHOICEIN), spotlighting the company's impressive financial achievements and strategic growth initiatives. Choice International Ltd. reported a significant 16% year-over-year increase in 1Q26 revenue, reaching ₹2.38B, alongside a 49% rise in EBITDA to ₹870M and a 50% increase in PAT to ₹480M. These figures reflect the company's enhanced operating efficiency and a notable 462bps y/y margin expansion.
The company's expansion is not just limited to financial metrics; it has also broadened its national presence to 208 branch offices and a distribution network exceeding 58,000 Choice Business Associates (CBAs). Management's confidence in maintaining an annual growth rate of 25–30% underscores the company's robust operational framework and market positioning.
Choice International's broking segment, accounting for approximately 60% of total revenue, demonstrated steady growth with client assets under broking hitting ₹478B, a 16% y/y increase. The digital transformation within this segment is evident, with 67% of broking revenue now generated online, highlighting the company's adaptability to evolving market trends.
The wealth management sector has seen exponential growth, with AUM expanding by 443% y/y to ₹47.7B, largely due to the acquisition of Arete Capital’s wealth business. This growth is supported by an integrated digital platform and a diversified product suite catering to HNI and UHNI clients.
Insurance distribution and NBFC segments also reported substantial growth, with premium collections rising by 62% y/y and the retail loan book doubling to ₹5.96B, respectively. The company's focus on secured MSME lending and rooftop solar finance, coupled with strong underwriting controls, positions it well for sustained growth in these areas.
Government advisory and investment banking segments further contribute to Choice International's diversified revenue streams, with a ₹5.86B order book and a ₹66B+ fundraising pipeline, respectively. These segments underscore the company's ability to leverage its expertise and institutional relationships for growth.
Stonegate Capital Partners' valuation of Choice International Ltd., utilizing DCF, EV/Operating Income, and P/E analyses, suggests a promising outlook for the company. This coverage initiation not only highlights Choice International's current achievements but also its potential for future growth, making it a noteworthy development for investors and industry observers alike.
