Choice International Ltd (NSE: CHOICEIN) Q4 2025 Earnings Call dated Apr. 23, 2025
Corporate Participants:
Arun Kumar Poddar — Executive Director & Chief Executive Officer
Ayush Sharma — Head of Investor Relations, Financial Controller
Analysts:
Aashvi Shah — Analyst
Ayush Sharma — Analyst
Raman Venkata Kerti — Analyst
Shubham Purohit — Analyst
Nayan Gala — Analyst
Unidentified Participant
Heena Parikh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 and FY25 earnings conference call of Choice International Limited. As a reminder, all participant lines will be in the listenerly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchstone phone.
I now hand the conference over to Ms. Ashwi Shah from AD FactsPR Investor Relations. Thank you. And over to you, Ma’am.
Aashvi Shah — Analyst
Thank you, Steve. Good evening everyone. On behalf of Choice International, I would like to welcome you all to the maiden earnings conference call for Q4 and FY25 today. On this call we have with us from the management, Mr. Arun Podar, Group CEO, Mr. Azay Kejriwal, Executive Director and Mr. Ayush Sharma, Head of IR. We will begin the call with the brief opening remarks from the management followed by a Q and A session. Please note that certain statements made during this call may be forward looking in nature.
Such forward looking statements are subject to certain risks and uncertainties that could cause the actual result or our projections to differ materially from those statements. Royce International will not be in any way responsible for any actions taken based on such statements and undertakes no obligation to publicly update these forward looking statements.
I would like to now hand over the call to Mr. Arun Kodar for his opening remarks. Thank you. And over to you, sir.
Arun Kumar Poddar — Executive Director & Chief Executive Officer
Good evening everyone. Thank you for joining us today for our first ever earning conference call. We are glad to interact with each one of you today. As we step into the new financial year, we are seeing increasing sign of resilience and momentum in the Indian economy. Despite global uncertainties, domestic fundamentals remain strong backed by steady GDP growth, robust credit demand and a growing appetite of investment. The stock market too reflects things with investor confidence supported by policy reforms, rising consumption and the digital innovation.
At Choice International, we believe this is an opportune time to build on our strength and continue creating value across all our verticals. Since this is our first interaction with many of you, I would like to begin with a brief introduction to our company, our business model and the key vertical that define our operations.
Choice International Limited is a leading financial service company with over a decade of experience in delivering technology driven financial services. We have built a diversified financial service ecosystem that cater to a broad spectrum of 13 Lakh clients across India ranging from retail investor to institutional clients. With a strong presence in tier 2 and tier 3 cities. Our business is structured 3 vertical. Each focused on creating value through specialized offering. Let me first highlight each of these verticals. Broking and Distribution the vertical contribute around 62% of our total revenue and it cater to equity broking, wealth management and the insurance distribution. Our major growth driver for the vertical has been our stock broking business. In FY25 we have total of 10 lakh plus VNET account serving more than two 41 active clients and with total client asset of 41,000 crore rupees a growth of 16% yoy basis. Under wealth product distribution we have an AUM of rupees 5,500 crore plus thousand plus crore. A growth of 793% growth on yoy basis. We offer comprehensive suite of product under this business. A major milestone in this year for the business was in principle approval from TEBI to sponsor and establish a mutual fund. This approval allow us to set up an asset management company and a trustee company expanding our financial services portfolio by entering the mutual fund industry. We aim to empower investor with tailored investment product and create value through disciplined and transparent fund management. Another major step we have taken this year is the acquisition of Farate Capital Service, a wealth management firm with AUM of 4,400 crore plus. This strategic acquisition significantly improved Choice Brokings wealth business division increasing its total AUM nearly five fold. Our last leg of our broking and distribution is our insurance distribution arm where our extensive network help us cater to both retail and SME segment. Our offering include life all the insurance products like health insurance, health and motor. In Q4 25 we have sold 52,000 plus insurance policies generating a premium of rupees 93 crore. We have 40 plus partnership with all the leading broking companies. Our POSP model is working really well for us enabling us to expand our reach by India. In FY25 we have 7,300 POSP registered driving significant growth in our distribution network. We are highly optimistic about the growth potential of all the businesses within our broking and distribution arm and are actively taking the right step to scale each one of them moving to our second business nbfc. The business operates at subsidiary Choice Windsor with a focused approach to retail lending tailored for MSME and individuals in semi urban and the rural market. Our portfolio span MSME Business loan, Vehicle loan and solar financing supported by tech enabled credit assessment. Framework and a dedicated in house collection team for effective risk management. As on FY25 our total loan book stands 768 crore rupees with a retail loan book of 629 crore rupees. Our car for the year stand 38.62% with a 0.83% of NNPA. Our robust underwriting process is further by partnership with all the major bank and financial institutions ensuring a well diversified liability portfolio. Additionally, our proprietary app Choice Money is enabling customer to access our offering with greater ease and efficiency. A key highlight for the vertical this year has been the acquisition of the retail lending business of Sourevar and the PASA Buddy through a slum sales conviction. This strategic move has significantly boosted our AUM and further strengthened our position in the lending landscape. With the strong support from the government for the MSME sector, we remain highly optimistic about the growth of our lending business. Our focus is on bridging the credit gap and addressing the key challenges faced by the MSME to enable their sustainable growth. Our third and the final segment is the Advisory business which contribute 26% of our total revenue. This segment comprises two key verticals government Advisory and the Investment banking. Through our subsidiary Choice consultancy we offer end to end consulting and advisory service to the government infrastructure project leveraging deep domain expertise, we support large scale initiative across 10 states. Our robust order book currently at 500 crore rupees plus is a strong testament of our execution capability and the sectoral knowledge. We have been instrumental in delivering projects at the grassroots level with notable work under the flagship initiatives such as JAL Jeevan mission. With increased government focus and capital allocation for our infrastructure development, we are very well positioned to become a preferred partner for public sector project across the country with the other vertical under this segment is Investment Banking where we have played a very key role in advising a range of corporate business corporate clients and successfully executed several IPO mandate till now we have concluded six IPO transactions successfully and 22 are ongoing mandate with a tentative fundraising pipeline of 6450 crore rupees plus. The growth of our business vertical is lead by the strong foundation provided by our Choice Business associate who serve as a trusted partner in delivering the services across India in FY25. I am proud to share that our CDA network has grown to over 53,000 partners creating a Pan India presence. And reinforcing our commitment to inclusive financial access. Technology has always been our core for the growth strategy. Backed by a strong in house tech team, we have successfully developed and launched a platform like Choice Finance, Choice Money and Choice Connect. These platforms are continuously upgraded with the new feature ensuring a seamless and intuitive experience of our customer and the partners. Today our footprint span a robust network of 192 branches and 49 project offices supported by a dedicated team of in house tech experts serving a diverse and growing clientele base. We remain committed to empowering India’s aspirations by democratizing access to financial product and delivering the joy of earning through innovation, inclusion and the customer first solution. With the deep industry expertise and the forward looking approach, we aim to be catalyst for growth, prosperity and the positive change. Despite recent challenges, we remain in our commitment to delivering long term value of our client, shareholder and society guided by the principle of integrity, fairness and innovation. Now I would like to now hand over to Ayush Sharma, our Head of investor relationship who will take us through the financial performance for the quarter and the year end. Thank you.
Ayush Sharma — Head of Investor Relations, Financial Controller
Thank you very much Arun Sir. While Arun sir has given a detailed understanding on each of our business verticals, I would like to take you all through the financial performance for the quarter. In the year ended FY25 so it reported a revenue of rupees 255 crore rupees for Q4FY25 a growth of 18%. Year on year basis EBITDA for Q4FY25 stood at 98.30 crore rupees growth of 42%.
YoY with EBITDA margins of 38.54%. PAT for the quarter stood at 53.5 crore rupees a growth of 36%. YoY with PAT margins of 20.98% which has resulted in increased margin by 277 basis points. On a full year basis we reported a total revenue of rupees 921.7 crore rupees growth of 21% on YYY basis. EBITDA for FY25 stood at 295.9 crores growth of 30%.
On a Y o y basis, EBITDA margins stood at 32.10%. Similarly PAD for FY25 stood at 162.7 crores a growth of 24% on yoy basis with pack margins of 17.65%. On the segmental front the broking and distribution reserve clocked in a total revenue of 551.2 crores. A significant growth of 21%. On a on a year on year basis, PBT for this vertical stood at 134.5 crore rupees. The NBFC business. Clogged in a total revenue of 114.8 crores with PVT of 7.4 crores. GNPA and NMPA stand at 15.49% and 0.83% respectively in this particular business vertical. Lastly, the advisory business had a total revenue of 250.3 crore rupees with PBT of 79.8 crore rupees. Our total debt on the book stands at Rupees 677.2 crores as on FY25 cash and cash equivalent for FY25 at 138.8 crore rupees. With this I would like to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembled.
The first question is from the line of Ayush Sharma from Alda Capital. Please go ahead.
Ayush Sharma
Yeah hi. Thank you for giving me the opportunity and congrats on a decent set of results. So I just had a couple of questions. So firstly on physical expansion on branches, what is the exact outlook and secondly how is the growth of wealth business evolving and finally how will use of technology contribute to your growth? So yeah these are my questions. Thank you.
Arun Kumar Poddar
Thank you. Thank you Ailush for the wishes. See this year when we started the year we were at 115 Number of branch offices on the closing we are at 192 branch offices. We have significantly expanded for the upcoming financial year we are planning to expand our branch network further by another hundred branches on a longer term basis.
If we have to take a you know five year plan we are planning to have our own branch office at you know almost all districts which are roughly around 800 districts across India. There is a major reason why we are largely focusing on you know focusing on the branch network because even today in the financial services space across semi urban geographies or you know Tire 3 and below geographies whenever we talk about any financial services the customer mindset is that they require a physical space.
This we have seen across various other industries also be it Edtech, be it you know likes of Lenskart who started online and eventually opened a store on the ground to service to this particular customer segment. So the similar thing is there for the financial services space. Also, we are largely bullish on the new entrants in the financial services. Which are going to come from tire tree and below geographies only. And we will be readily available on the ground with our physical branch network on, you know, for, for these set of customers. What was the another question? I wish I missed that.
Ayush Sharma
Yeah, it was on your wealth business and how is the, you know, the business side doing? How is it evolving basically?
Arun Kumar Poddar
Okay, so the second question on the, on the wealth businesses, you know, we’re largely focusing on, you know, the retail customers as well as the HNI and institutional clients. We had built a distribution of, you know, retail mutual fund and wealth products for with our own team with the acquisition of Areth Capital. We have onboarded, you know, the HNI and institutional clients also there because the Arex forte was on the institutional space.
So we are, we are planning to grow on both the business model. As far as the technology is concerned. Technology works as an enabler. I would like to proudly say that our technology is no less than any other competitor in the industry. Even I would say in some spaces we are even better than the competition. However, at the same time, business model largely remains on the physical presence which is supported by the technology for the faster execution and seamless client services. So that’s our view on the tech path.
Ayush Sharma
All right, understood. Thanks a lot and all the best.
Arun Kumar Poddar
Thanks.
Operator
Thank you. The next question is from the line of Ritika Dua from Bandhan amc. Please go ahead. Hello ma’am, your line has been unmuted. Please go ahead with your question. We will move on to the next question. It’s from the line of Raman KV from Sequent Investments. Please go ahead.
Raman Venkata Kerti
Hello, can you hear me?
Arun Kumar Poddar
Yeah, please go ahead.
Raman Venkata Kerti
So first, with respect to the advisory services, we have 500 order book. Can, can you give how much of that, what percent of the order book is with respect to, you know, and roads and highways like the order books lit and what is the execution timeline like?
Arun Kumar Poddar
Okay, so when I, when it comes to the advisory order book, the tentative average timeline for execution of one project ranges from 24 months to 36 months time. Of course, it depends what kind of services we are providing. If it is a DPR, it is completed average within nine to 10 months time.
If it is a combination of DPR and PMC both, the average goes to, you know, 24 to 36 months time. We are largely focused on the mission projects of the government. If you will see our history, when we started our advisory business, roughly. Around 2014, 2015, the largest focus of the government was on to the road and highway projects. And so was the focus of our company SL. We designed and supervised more than 3,000 km road in the initial 2, 3 years. In the second tenure of the NDA government after 2019, the focus shifted to the Jaljeevan mission. And that was a mission project of the central government. And so was our company’s focus on the water, you know, water pipeline and designing and supervision kind of project. So we are working in line sync with the government’s vision so that we are able to execute projects fast, smooth and you know, on the, on the timeline. As far as today’s water book is concerned, I would say roughly around 60, 65% comes from water related projects and remaining 40 to 35% comes from other projects.
Raman Venkata Kerti
Any following? Sir.
Arun Kumar Poddar
Sorry, you are asking to repeat the percentage or.
Raman Venkata Kerti
Yeah.
Arun Kumar Poddar
Okay. So the split for the water related projects with the total is roughly around 65% and for other projects it is roughly around 35%.
Raman Venkata Kerti
Okay, got it. So with respect to NBFC, so there the nbsp book has grown by 53% like the network. I just want to understand like quarter on quarter, what was the reason for this huge growth in the book of the NBFC business?
Arun Kumar Poddar
Okay, so in F. In Q3, we had acquired retail lending business of Petability Finance Private Limited, a Jaipur based NBFC and a distribution business of Shaw Financial Services Private Limited, another distribution company based out of Japur under a slum sale transition. Right. So this transition has led to a significant jump into the AUM of the nbfc.
Raman Venkata Kerti
Oh, okay. And sir, can. Can I get the. Get the interest in. With respect to the NBFC business?
Arun Kumar Poddar
Okay, so on an on consolidated book level the yield amounts to roughly around 20.5 to 21%. 20.5 to 21%.
Raman Venkata Kerti
Okay. And so what is the guidance with respect to the NBFC business as well as I mean the distribution of mutual services for the FY22.
Arun Kumar Poddar
So our focus in the NBSP is largely on to the MSME customers in the semi urban and rural geographies. The largest product which we do in the NBSC space is Lab Loneliness properties where the ticket size, rent. Is from six to eight lakh rupees per customer. However, as we grow in size our focus will go to prime borrowers also where the ticket size will come to somewhere around 12 to 15 lakh rupees and a slight decline in the average interest rate will also be there. However, at the same time the distribution cost and the credit cost is also lower for that particular customer segment. So. So you can expect a growth of somewhere around 25 to 30% CAGR in the NBFC business over the couple of years. At the same time in the nbfc our one major focus is on the co lending business also where we are entering into partnerships with the various banks and larger NBFCs to provide lending as a service where we are onboarding the customer and it will be booked under the 80, 20, 90, 10 kind of ratios. So that’s more onto the NBFC business. On the wealth space, as I had mentioned we are focusing on both retail as well as the institutional HNI customers. Our focus on the retail space is to leverage our existing branch infrastructures where we are going to utilize our existing team which is there at the branches to distribute the mutual fund related products. And on the central level we have a dedicated team for the HNI and institutional clients. So that’s how we are planning to distribute grow the wealth related business.
Raman Venkata Kerti
Okay sir, just one last question. With respect to the nbfc, you mentioned that majority of the loans lack loan against property. What percent of the AUM is lacking out of.
Arun Kumar Poddar
Around 768 crores roughly around 430 crores is less. Around 125 crores is commercial used commercial vehicle. The rest is solar and other, you know, loads.
Raman Venkata Kerti
Thank you sir.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question you may press star and 1. The next question is from the line of Shubham Purohit from SBI Securities. Please go ahead.
Shubham Purohit
Yeah. Hello. Am I audible?
Arun Kumar Poddar
Yes.
Shubham Purohit
Yeah. So congratulations sir on your good side of results especially in this challenging environment. My first question is with respect to how we are placed against competitors like Angel1 and and if you could, you know, highlight what is our mode compared to this competitor.
Arun Kumar Poddar
So there is a difference of you know, approach how we are, you know, taking it, taking the business. Business model, we largely focus on the customers who are into semi as well. Of course digital and physical distribution have different set of challenges and different set of benefits. So I would say that we are as we have, we have been consistently growing over the last six years. Of course, with a high rate of cagr, we have been growing roughly around, you know, roughly around 55, 60% kind of number in the revenues and roughly around 70% impact. But at the same time in the broken business, we are expecting to grow at 30, 35% kind of over the next couple of years. Also the largest difference between the competitors and us is we prioritize the handholding of customers across all their, across their whole, you know, financial services journey. Be it investments, be it, you know, the loans, be it stock market trading, etc. So, so, so that’s the kind of, you know, guidance we can give you on this question. Okay.
Shubham Purohit
Okay, thank you sir. And for one last question, you know, as you have seen in the recent past, the company lot of acquisitions. So are we planning to, you know, plan for more acquisitions going forward and if so, how are we planning to fund this?
Arun Kumar Poddar
So of course we have done couple of acquisitions over the recent years and we intend to continue the same. There is no doubt about it. As far as the funding for the acquisitions are concerned, we have enough internal accruals to, you know, to support that.
Shubham Purohit
Okay, sir, thank you, that will be all.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. The next question is from the line of Nayan Gala from Ortiga Wealth. Please go ahead.
Nayan Gala
Yeah, thanks for the opportunity. So can you please throw some light on the advisory business? Since this is an unrelated business, it would be great if you could give some idea as to how does this business model work, how many projects in the pipeline and overall guidance for this vertical.
Arun Kumar Poddar
Okay, so I’ll give you a brief. We work on advisory. So there are two sub segments within the advisory business. Name one is the government advisory and second is the investment banking. When it comes to government advisory, we do couple of services for the government infrastructure project as well as financial services projects for the government.
In infrastructure we do prepare detailed project reports. So think of a road and highway being constructed. There is a design required to be prepared, the complete document, what will be the route, what will be the material use, what will be the cost to construct, what will be the benefit of that particular project, socioeconomic impact, et cetera, et cetera. All these information is consolidated into the detailed project report which is called a cpr. So we do prepare the detailed project report, we do conduct the feasibility study and once the construction starts we do the supervision. This, as you rightly said, this is a kind of a different, you know, business than the other group businesses. However, at the same time this diversification support us, you know in the, in the, in the challenging or turbulent times as the markets have know have performed not very well over the last couple of months. So we have. But however at the same time we have seen a surge in the government advisory business where you know, we were able to execute government projects. And so you can see this is very well visible in our numbers also that you know, this, this balances, you know, the market macroeconomic scenarios. So that’s why we are into, you know, this particular business.
Nayan Gala
Thanks God. Secondly, can you give some guidance on your insurance business and how are we planning to grow?
Arun Kumar Poddar
Okay. On the insurance business part again in insurance also we do both retail as well as corporate. In retail we do largely, you know, the life, health and motor and in corporate we do liability insurance group mediclaim, institutional products like credit shield etc. We have seen a very good growth over the last couple of years in the insurance business and we are very bullish that we will be able to achieve more from both the segments as we grow on the distribution space across, all across the broking business we will be able to do more cross sell for the retail customer and for the institutional desk.
We have a dedicated team here in Bombay and as well as couple of other branches also in the larger metros who are, you know, dedicatedly working with insurance companies to design, you know, the customized products for the need of large corporates. So that’s the plan to grow in the insurance business.
Nayan Gala
Got it. That’s also my guide.
Operator
Thank you. The next question is from the line of Swaraj Pathway, an individual investor. Please go ahead. Mr. Swaraj, your line has been unmuted. Please go ahead with your question. Mr. Suaze has been unmuted.
Unidentified Participant
Hello. Am I audible?
Unidentified Participant
Yes, I wanted to ask about advisory.
Unidentified Participant
Now currently our main focus is on the broken business. Are we planning to increase the share of our services, advisory services business? Are we going to increase the percentage revenue from this business? And also about the NBFC business, are you going to increase the book?
Arun Kumar Poddar
If I have understood correctly, you are asking about the contribution of each business vertical, is that right?
Unidentified Participant
Yes, yes, yes. I. I just wanted to ask which part of the business.
Arun Kumar Poddar
Okay, so. So we are equally focusing on all business verticals. There is no that we are focused on any spec business vertical or any specific business is not of focus to us. However, at the same time as the largest contribution to the total revenues comes from broken in distribution, we expect this to continue for the medium term.
However, at the same time we expect that insurance distribution as it has been growing rapidly over the couple of years, we see that in the foreseeable future insurance will be a separate segment and there will be total four segments, broking and distribution, excluding insurance, insurance distribution, MBSC and advisory. So that’s how we are, you know, looking to grow at our all our segments.
Unidentified Participant
Okay, thank you. Another question about the.
Operator
Sorry to interrupt. The current participant has been disconnected. We will move on to the next question. It’s from the line of Hina Parikh from Finvest First Advisors. Please go ahead.
Heena Parikh
Hello. Hi. Thank you for the opportunity, sir. I just had a couple of questions. I’ll go with the first one. What are the next steps following the in principal approval from the SEBI to launch mutual fund and when do we expect to begin the operation? Also, what kind of products will you initially focus on?
Arun Kumar Poddar
Okay, so as we have, we have, we had received the principal approval, I think in the month of December. We have submitted the, the application for the final approval. Usually it takes six months time for the CB to, you know, get the final approval. After the. As soon as we get the final approval, we’ll begin with the operations. To begin with, we will be coming up with the ETF and that is going to be the first product followed by, you know, the other products.
Heena Parikh
Okay, thank you so much. On the NDIP business, What is the geographical split for the MBS business and which are the other areas that we are planning to target?
Arun Kumar Poddar
So currently we, our NBFC operations are spread across Rajasthan, Gujarat, mp, Delhi, NCR and some parts of Maharashtra. In Maharashtra we are into mmr, Mumbai Metropolitan region. These are the focused geographies where we have been operating and these are going to remain as focus geographies. You know, in the medium term of course we are expanding our NBSC operations. But the way we expand is we expand.
So let’s take an example. We are, we are operating out of town A. So we choose a town B which is in the. In the proximity of 50 km from our existing branch and then we expand to that town B. So this is the way we are approaching for our branch expansion in the nbfc.
Heena Parikh
Okay, understood. And one last question. Can you elaborate on our customer retention strategies considering the volatility in the market?
Arun Kumar Poddar
On the customer retention part, there are. There is a dedicated team. You know, we work on both the models. One is physical and second is the digital. As majority of our customers use the mobile app called Choice Connect, they trade on the Choice Connect. There is a dedicated team in the digital team also which keep on sending the notifications messages. Advantages to the customers of using the ChoiceFinx app, they work on retention part. And second, we have a central team which work with the branch team to ensure the customer retention. These are by way of provision of the quality services, I would say through which we put our efforts to retain the experience.
Heena Parikh
Thank you so much.
Arun Kumar Poddar
Thank you.
Operator
Thank you. A reminder to all participants that you may press Star and one to ask a question. As there are no further questions from the participants, I now hand the conference over to Mr. Arun Podal for closing comments.
Arun Kumar Poddar
So it has been great connecting with all of you as we close another strong financial year. One filled with the progress and the promises at Choice International. Our commitment to empowering communities through responsible. Impactful and the financial solution. We are optimistic about the opportunities ahead, especially in the financial services space, and look forward to staying in touch as your time permits. Thank you for being part of this journey and wishing each of you continued success in the eer. Thank you.
Operator
Thank you on behalf of Choice International limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.