Choice Groups’ Revenue increased by 48% YoY in Q1 FY25

Choice International has exhibited excellent performance for the last financial year and now we have entered the new financial year with even higher enthusiasm and energy. We are thrilled to share Choice International's remarkable performance in Q1. This quarter has seen significant improvement compared to the same period last year, reflecting our team's unwavering dedication and relentless efforts. We have set new goals for this year and are on track to achieve these targets. I am proud to share this success with our readers, investors, and stakeholders. It's a testament to the hard work and commitment of our team who have played a vital role in our achievements.

Excellence in Action:

The Indian economy has started the new financial year on a strong note, establishing a solid foundation for the year ahead. Q1FY25, being focused on elections, led to a stock market rally, with the prominent indices like Nifty and Sensex touching an all-time high and providing excellent returns to investors.

The sustained market rally led to a notable growth in the addition of new demat accounts, which stood at by 42 lakh in June, reaching the total of 12.2 Cr accounts in June 2024. This is the highest account opening rate since February 2024. The number of active users on NSE increased to 4.42 Cr in June 2024 from 3.09 Cr in June 2023, whereas the overall average daily turnover (ADTO) increased 15% MoM to Rs 499 lakh Cr. The data highlights dynamic fluctuations in market activity and trading volumes, reflecting the impact of investor preferences and market conditions.

About Choice:

Here's a brief primer on our company for new readers.

Choice International is one of the leading financial services firms, listed on both exchanges. The company primarily operates on 3 key verticals:

1) Broking & Distribution (stocks, mutual fund and insurance) contributing 67% of revenues.
2) Advisory Business (Government and Corporate advisory) contributing 21% of revenues.
3) NBFC business (MSME retail loans) contributing 12% of revenues.

With operations over 149 offices in 22 states and union territories, Choice has carved its space into the Tier III cities and beyond offering services through a strong network of 41k+ Choice Business Associates. We operate on a combination of digitalization and providing a personalised experience, and therefore offer services through our simple to use applications developed in-house like Choice Finx (for broking), Choice Money (NBFC) and Choice Connect (CBA network).

Performance Update for the Quarter-End

The first quarter of FY25 has clocked in significant growth. I am thrilled to announce that we have established new records for revenue growth and profitability. Revenue for Q1 FY25 stood at Rs. 205.9 Cr, a growth of 48% YoY. EBITDA & PAT for the quarter stood at Rs. 58.2 Cr and Rs. 32.0 Cr, a growth of 55% and 51% respectively.

The company's revenue has shown a steady upward trend, with each year outperforming the last, over the past two years.

Along with an exceptional financial performance during the quarter, Choice International has achieved a major financial milestone, reaching a market capitalization of 7,700 Cr and demonstrating its dedication to delivering shareholder value.

Segment Performance Overview:

CIL has always believed in providing a one stop solution for a customers’ financial needs and has therefore diversified its business into three key verticals – Broking & Distribution (67%), Advisory business (21%) and NBFC Business (12%). Our objective is to attain an equal contribution from all three verticals, aiming to diversify our risk and decrease reliance on a single segment for growth.

As mentioned earlier, Q1 has seen an enormous rise in the additions of new demat accounts, pushing the total to a record high. This surge, with a monthly average of over 30 lakh new registrations, was driven by several factors: an increase in India's weightage in MSCI indices, growing interest from Foreign Institutional Investors (FIIs), and a rise in equity mutual fund investments among young investors at the broker and depository levels. Additionally, rising income levels and a growing interest in the stock market has been contributing to this growth.

Broking & Distribution:

Our Broking business includes Stock Broking, Wealth Advisory and Insurance broking accounting for 67% of our total revenues that is Rs. 129.6 Cr.

With increasing awareness among investors, retail participation in the stock market has steadily increased. Choice Equity Broking added 42K demat accounts, bringing the total to 890K demat accounts. By enhancing user retention and targeting Tier III cities and beyond, the stock broking vertical experienced improved growth this quarter. Emphasizing client acquisition through our proprietary application ‘Choice FinX’ remains our primary focus. This year our focus continues to remain on expanding our operations in more and more locations across India and adding more branches to our network.

The Wealth business, with major contribution from Mutual fund distribution has clocked in a total AUM of Rs. 878 Cr in Q1 FY25, a growth of 111% YoY. The monthly SIP book for this quarter stood at Rs. 7.7 Cr, a growth of 48% YoY.

The insurance industry in India is experiencing a significant growth trajectory, driven by a combination of factors. Rising disposable income has led to increased demand for insurance products, while the entry of private players has brought in much-needed innovation and competition. A supportive regulatory environment has further facilitated growth, resulting in an increase in insurance penetration rate in India. Moreover, development of strong distribution channels have enabled insurers to reach a wider audience. As a result, the Indian insurance industry is poised for continued growth, with experts predicting a significant increase in premiums and policyholders in the coming years. We at Choice have seen this growth translate in our business, In Q1 FY25, we sold over 26,916 policies, marking a 236% YoY growth, with a premium of Rs. 47 Cr, a 39% YoY increase. Throughout the quarter, we focused on consolidating our institutional business and strengthening collaborations, resulting in an increased conversion rate.

We have embarked on developing an in-house motor portal to enhance the online customer experience seamlessly. This initiative positions us as one of the few insurance brokers in the industry with our own portal. Additionally, we've seen a 154% increase in insurance policy inquiries on a YoY basis, maintaining a conversion ratio of 80%. Currently, we've forged successful partnerships with over 25 insurance providers, enabling us to offer their products through our Choice FinX app.

Our NBFC business continues to positively impact India's MSME sector. Our focus remains on empowering MSMEs through tailored retail lending solutions, particularly in dynamic semi-urban and rural areas. This segment has scaled up significantly, boasting a robust loan book of Rs. 453 Cr, with Rs. 286 Cr dedicated to retail lending as on Q1FY25.

Our mission is to expand financial access to Tier III cities through strategic digitalization, with 'Choice Money' at the forefront of our efforts. This user-friendly app streamlines the lending process, ensuring efficient and convenient loan provision for our customers. By leveraging technology, we aim to drive financial inclusion and growth in underserved regions.

Despite numerous regulatory and economic changes, NBFCs are outperforming banks, signalling significant growth prospects in this sector. Our primary focus lies within the MSME sector, where we are dedicated to simplifying and digitizing the credit process. Over 99% of our loans are directed towards MSMEs and the Green Energy sector, with a particular emphasis on loans under Rs. 1 mn, our target demographic includes young individuals aged 25 to 35 years old.

Our robust underwriting processes ensure sound risk management, while our diversified liability profile is fortified by partnerships with leading institutions.

Our subsidiary Choice Consultancy, houses the Advisory business catering to Central, State Government and leading corporates, currently contributes 21% of total revenues. It has demonstrated remarkable performance, boasting a robust order book of Rs. 545 Cr as on Q1 FY25. Maharashtra leads with a 50% contribution to the total order book, followed by Rajasthan at 28%. Our extensive network includes partnerships with over 500 Urban Local Bodies, 25 State Departments, and more than 10,000+ Panchayati Raj institutions.

Operating from over 45 project offices, our primary objective is to support the government in implementing grassroots projects. Till date, we have successfully served over 200k PMAY beneficiaries, demonstrating our commitment to impactful community development initiatives.

What Sets Us Apart?

Choice International has pioneered a revolutionary asset-light B2B2C business model, seamlessly integrating technology-driven financial solutions with personalized service. Our proprietary 'Choice Connect' engine, coupled with extensive training and digital tools, transforms individual agents into comprehensive financial advisors. This innovative approach enables us to provide end-to-end financial services, fostering long-term relationships and driving business growth. Presently, our network includes over 41K+ Choice Business Associates, aiding us in serving customers nationwide. This network is expanding rapidly, particularly in less developed regions, driven by growing financial awareness among the people.

Contributing to ‘Bharat’s Growth Story’

As we embark on a new chapter, Choice International remains steadfast in its commitment to fuelling India's growth engine. Our purpose is clear: to drive economic progress, create employment opportunities, and unlock financial freedom for all.

With a strong foundation in place, we're poised to amplify our impact. We will continue to innovate, expand our reach, and nurture our team's talent. Our sights are set on leading the charge in financial inclusion, with a special focus on empowering semi-urban population.

As we reflect on our milestones achieved in the last quarter, we're energized by the journey ahead. We're grateful for the trust and support of our shareholders, partners, and stakeholders. Together, we'll forge a legacy that inspires generations to come.

Arun Poddar

Arun Poddar is the CEO and Executive Director of Choice International Limited. With extensive experience in the financial sector, he leads the company with strategic vision and expertise. Arun Poddar is committed to driving growth and ensuring excellence in operations, contributing to the success of Choice.