Stonegate Capital Partners Initiates Coverage on Choice International Ltd. (NSE: CHOICEIN)

DALLAS, TX -- August 6th, 2025 -- Choice International Ltd. (NSE: CHOICEIN): Stonegate Capital Partners initiates their coverage on Choice International Ltd. (NSE: CHOICEIN). Choice International reported a strong start to FY26, with 1Q26 revenue of ₹2.38B, up 16% y/y. EBITDA rose 49% concurrently to ₹870M, and PAT increasing by 50% to ₹480M, driven by improved operating efficiency and a 462bps y/y margin expansion. The Company continued expanding its national footprint with 208 branch offices and a growing distribution network of over 58,000 Choice Business Associates (CBAs). Management reiterated its expectation to maintain 25–30% annual growth. 

Company Updates:

Stock / Equity Broking: The broking segment, which contributed ~60% of total revenue, recorded steady growth during the quarter. Client assets under broking reached ₹478B, marking a 16% y/y increase. Demat accounts grew 29% y/y to 1.15M, with active accounts rising ~241,000. Digital engagement continues to strengthen, with 67% of broking revenue now generated online.

Wealth Products: Wealth management remained a high-growth vertical, with AUM expanding 443% y/y to ₹47.7B, primarily due to the acquisition of Arete Capital’s wealth business. The Company continues to deepen penetration among HNI and UHNI clients, backed by an integrated digital platform, in-house research, and a broadened product suite across mutual funds, SIPs, bonds, and structured products.

Insurance Distribution: Choice’s insurance distribution business saw continued traction across both retail and corporate channels. Retail premiums totaled ₹390M, while corporate premiums reached ₹539M. Premium collections rose 62% y/y to ₹763M, supported by a 46% increase in policies sold. The Company added 42+ insurer partnerships and expanded its POSP network, contributing to a 91% y/y increase in retail health insurance inquiries.

NBFC Segment: The NBFC vertical continued to scale its MSME and green finance offerings. The retail loan book doubled y/y to ₹5.96B, while the total loan book reached ₹7.45B. Credit quality remains stable with NNPA at 2.25%, PCR at 48.9%, and CRAR at 53.4%. NIM expanded to 11.85%, up 85bps sequentially. The portfolio is primarily focused on secured MSME lending and rooftop solar finance, supported by 75 branches across 8 states and strong underwriting controls.

Government Advisory: Choice’s government advisory segment ended 1Q26 with a ₹5.86B order book, anchored by new project wins including a ₹528M World Bank–funded mandate in Maharashtra and ₹670M worth of digitization initiatives. Segment revenue was ₹600M with PBT of ₹240M, comprising ~24% of total revenue.

Investment Banking: The division remains active with 24 ongoing mandates and a ₹66B+ fundraising pipeline. To date, 7 IPOs have been completed and the division is leveraging its cross-vertical presence and strong institutional relationships to expand its mid-market advisory footprint.

Valuation: We use a DCF Model, EV/Operating Income comp analysis, and a P/E analysis to guide our valuation. Our DCF analysis produces a valuation range of $7.01 to $12.88 with a mid-point of $9.12. Our EV/Operating Income valuation results in a range of $9.07 to $10.10 with a mid-point of $9.58. Our P/E analysis returns a range of $8.68 to $10.25 with a mid-point of $9.47.

About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.

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