Excellence Unfolds: Choice International Sustains Exceptional Performance

Q2 FY25 Revenue increased by 29% YoY to ₹ 249 Cr

We are pleased to announce that the first half of this financial year has been a resounding success, with impressive numbers that put us firmly on track to meet our annual targets. Choice International's outstanding performance in Q2 and H1 reflects significant growth compared to the same period last year, showcasing the dedication and relentless efforts of our team.

As we move forward through the remainder of the year, I am excited to share these accomplishments with our readers, investors, and stakeholders. Our mission of empowering financial independence remains steadfast, and we continue to work toward expanding our reach to every corner of the country. This blog will not only highlight our achievements but also offer a glimpse into our vision for the future, as we push the boundaries of financial inclusion and bring services to even the most remote regions of India.

Excellence Unleashed:

India ranked as the second-best performing major global market in the first half of FY 2024-25, following Hong Kong, with Singapore, the US, and China rounding out the top five. Despite a minor dip in May, Nifty 50 index saw gains each month, driven by strong investor inflows, political stability after May’s general elections, and a robust economic growth outlook.

India’s stock market is witnessing a surge in new investors, with demat accounts surpassing 171 million as of August 2024—more than the population of Russia, Mexico, and Japan. Cash ADTO saw a 4% month-on-month decline in September 2024. While futures’ volumes dropped since July, options grew in the latter half of H1 FY25, driving F&O ADTO growth of 7% in September. The data reveals significant fluctuations in market activity and trading volumes, showcasing the influence of investor preferences and prevailing market conditions.

About Choice International:

One of the leading financial conglomerates with over a decade’s expertise providing tech-led services.

Performance Update for the Quarter and Half Year End

The second quarter of FY25 marked significant growth for Choice International, with revenue reaching ₹249 Cr, a 29% YoY increase. EBITDA and PAT grew by 51% and 56% YoY, standing at ₹78 Cr and ₹46 Cr, respectively. For the half-year, revenue surged 37% YoY to ₹455 Cr, while EBITDA rose 52% to ₹136 Cr, improving margins to 30%. PAT grew 53% to ₹78 Cr, with margins increasing to 17%, reflecting strong profitability.

Additionally, Choice International hit a key milestone, crossing a market capitalization of ₹9,000 Cr+, reinforcing its commitment to delivering value to shareholders.

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 (64%), Advisory business (26%) and NBFC Business (10%). Our goal is to achieve balanced contributions from all three verticals, aiming to diversify risk and reduce dependence on any single segment for growth.

Broking & Distribution:

Our Broking business includes Stock Broking, Wealth Advisory and Insurance broking accounting for 64% of our total revenues that is ₹ 158 Cr.

As investor awareness grows, retail participation in the stock market has been steadily rising. The stock broking business has added 40K demat accounts, bringing the total to 931K demat accounts. Our stock broking division has seen significant growth, driven by a strong emphasis on user retention and expansion into Tier III cities and beyond. Our primary focus continues to be on client acquisition through our proprietary application, ‘Choice FinX.’ A key goal for this year is to further expand our operations across additional locations in India and to grow our branch network.

The AUM for the Wealth Management business reached ₹ 1,127 Cr, marking a substantial YoY growth of 129%. This significant growth can be attributed to our intensified cross-selling efforts, which have been made possible by our extensive and diverse portfolio of products within this business segment. By leveraging the variety of offerings we provide, we’ve been able to meet a broader range of client needs, thereby increasing customer engagement and loyalty. This strategy has not only deepened existing relationships but also attracted new clients, fueling our overall growth in this area.

The Indian insurance industry is on track for sustained growth, with experts anticipating a significant surge in premiums and a growing base of policyholders in the years ahead. In Q2 FY25, we have sold over 68,666 policies marking a growth of 687% YoY, with a premium of ₹ 65 Cr, which is a 31% YoY increase. Our ongoing emphasis on corporate B2B and institutional clients has led to a higher conversion rate, achieving an impressive 72% success ratio. Additionally, we have experienced a remarkable 220% YoY increase in insurance policy inquiries. Currently, we have established successful partnerships with more than 40 insurance providers, allowing us to offer their products through our Choice FinX app.

Navigating SEBI’s New Regulations

SEBI has been instrumental in driving the growth in the capital markets while protecting investor sentiments. We at Choice support and abide by the new regulations introduced by SEBI to protect our customers’ interests.

Recent SEBI regulations, particularly the "true-to-label" mandate, require brokerage firms to charge customers in alignment with exchange charges, eliminating practices where differential pricing was offered to clients. This move is designed to ensure greater transparency and fairness in the market, fostering increased investor trust. The expectation is that these reforms will not drastically reduce customer volumes or revenue, with most firms predicting only an 10% initial impact on revenue, which they believe will be offset by other strategic adjustments.

Additionally, the introduction of new rules limiting weekly options to one contract per exchange, rather than multiple, is expected to significantly reduce overall F&O volumes. However, the anticipated shift of customers from F&O to cash segments should help to mitigate the decline. While these regulatory changes, may impact short-term volumes and revenues, they are not expected to have long-term adverse effects due to the rapidly growing customer base and the stability of the platforms offered by top brokerage firms.

The Next Frontier in Stock Broking: A Forward-Looking Perspective

The future of India's stock broking industry appears bright, driven by a combination of favourable market conditions and rapid technological advancements. The stock broking industry is undergoing a tech-driven transformation, with AI, machine learning, and block chain enhancing trading efficiency and transaction security. As millennials and Gen Z increasingly enter the market, brokers are adapting by offering mobile-friendly platforms, personalized services, and educational tools. ESG-centric investing is also on the rise, as younger investors seek to align their portfolios with sustainable companies. Additionally, efforts to improve financial literacy through government and private initiatives are equipping new investors to make informed decisions, fuelling continued retail participation.

NBFC:

Our NBFC business is actively contributing to the growth and development of India's MSME sector. This business currently contributes 10% of total revenues, with a total loan book of ₹458 Cr, including a retail loan book of ₹308 Cr. NBFC retail lending in India is growing, especially in the Tier I- III cities. To capture this opportunity, at Choice we are focusing more on retail loans and digitizing our lending operations to streamline and fast track our processes through our mobile app, ‘Choice Money'. This has led to a surge in the revenues for this vertical.

Our primary focus is on the MSME sector, where we are dedicated to streamlining and digitizing the credit process. More than 99% of our loans are directed toward MSMEs and the Green Energy sector, with a specific emphasis on loans under ₹1 million. We particularly target young individuals aged 25 to 35, aligning with their financial needs and aspirations. Our rigorous underwriting processes ensure effective risk management, while our diversified liability profile is reinforced through strategic partnerships with leading institutions.

Expanding Horizons: Choice Finserv Acquires Paisabuddy and Sureworth

To highlight another accomplishment for this quarter, Choice Finserv has acquired the Retail Lending Businesses of Paisabuddy Finance Pvt Ltd and Sureworth Financial Services Pvt Ltd. This move is set to boost Choice Finserv's total AUM from ₹457.68 Cr to ₹801 Cr, including off-book AUM, marking a 75% growth. The acquisition will also expand Choice Finserv’s branch network from 71 to 168 locations, covering key regions such as Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh, and Delhi NCR.

The acquisition aligns with Choice Finserv’s strategic focus on sustainable finance, with plans to expand its green finance portfolio, including funding for rooftop solar projects and electric vehicles. We view this acquisition as a significant step towards deepening financial inclusion and addressing the credit needs of underserved MSMEs and retail customers. By integrating the operations of Paisabuddy Finance and Sureworth Financial Services, Choice Finserv aims to strengthen its presence and expand its reach across its target markets.

Note: The above acquisition is being done under Slump sale transaction on a going concern basis subject to requisite approvals.

Advisory:

Our subsidiary Choice Consultancy, which oversees the Advisory business contributed 26% of our total revenues and has delivered strong performance with a robust order book of ₹ 550 Cr. Our active participation in grassroot government projects and key initiatives has significantly bolstered our order book, highlighting our commitment to supporting government efforts. Maharashtra leads with a 53% contribution to the total order book, followed by Rajasthan at 26%. Operating in 3 states across 100+ districts and 50+ project offices, our primary objective is to support the government in implementing grassroots projects. We have successfully served over 200,000 PMAY beneficiaries to date, highlighting our strong commitment to impactful community development initiatives.

A Legacy of Financial Empowerment:

At Choice International, our commitment to financial inclusion goes beyond mere business—it is at the core of who we are. As we reflect on our journey through this quarter, we remain driven by our mission to serve clients, shareholders, and society with integrity, fairness, and innovation.

We stand as a company with a conscience, tirelessly working to promote equitable financial access for all, while ensuring peace of mind through financial security. Our forward-thinking approach, combined with the wisdom gained from our extensive experience, positions us as a catalyst for prosperity.

Together, with our esteemed clients, dedicated employees, and supportive stakeholders, we will continue to build a legacy of empowerment that extends across generations. The road ahead is filled with possibilities, and we are ready to drive positive change for a more inclusive and sustainable future.

Thank you for being part of our journey, and we look forward to achieving greater milestones together.