Stonegate Capital Partners has initiated coverage on Choice International Ltd. (NSE: CHOICEIN), a diversified financial services company, following a strong first quarter of fiscal year 2026. The company reported revenue of ₹2.38 billion for the quarter ending June 30, 2025, a 16% year-over-year increase. EBITDA rose 49% to ₹870 million, and profit after tax (PAT) increased by 50% to ₹480 million, driven by improved operating efficiency and a 462 basis points year-over-year margin expansion. Management reiterated its expectation to maintain 25–30% annual growth.
The stock and equity broking segment, which contributed approximately 60% of total revenue, recorded steady growth. Client assets under broking reached ₹478 billion, a 16% year-over-year increase. Demat accounts grew 29% year-over-year to 1.15 million, with active accounts rising by about 241,000. Digital engagement continues to strengthen, with 67% of broking revenue now generated online. The company expanded its national footprint to 208 branch offices and a distribution network of over 58,000 Choice Business Associates (CBAs).
Wealth management remained a high-growth vertical, with assets under management (AUM) expanding 443% year-over-year to ₹47.7 billion, primarily due to the acquisition of Arete Capital's wealth business. The company continues to deepen penetration among high-net-worth and ultra-high-net-worth clients, backed by an integrated digital platform, in-house research, and a broadened product suite across mutual funds, SIPs, bonds, and structured products.
Choice's insurance distribution business saw continued traction across both retail and corporate channels. Retail premiums totaled ₹390 million, while corporate premiums reached ₹539 million. Premium collections rose 62% year-over-year to ₹763 million, supported by a 46% increase in policies sold. The company added over 42 insurer partnerships and expanded its POSP network, contributing to a 91% year-over-year increase in retail health insurance inquiries.
The NBFC vertical continued to scale its MSME and green finance offerings. The retail loan book doubled year-over-year to ₹5.96 billion, while the total loan book reached ₹7.45 billion. Credit quality remains stable with net non-performing assets (NNPA) at 2.25%, provision coverage ratio (PCR) at 48.9%, and capital adequacy ratio (CRAR) at 53.4%. Net interest margin (NIM) expanded to 11.85%, up 85 basis points sequentially. The portfolio is primarily focused on secured MSME lending and rooftop solar finance, supported by 75 branches across eight states and strong underwriting controls.
Choice's government advisory segment ended the quarter with a ₹5.86 billion order book, anchored by new project wins including a ₹528 million World Bank–funded mandate in Maharashtra and ₹670 million worth of digitization initiatives. Segment revenue was ₹600 million with profit before tax (PBT) of ₹240 million, comprising approximately 24% of total revenue.
Stonegate Capital Partners uses a DCF model, EV/Operating Income comp analysis, and a P/E analysis to guide its valuation. The DCF analysis produces a valuation range of $7.01 to $12.88 with a mid-point of $9.12. The EV/Operating Income valuation results in a range of $9.07 to $10.10 with a mid-point of $9.58, and the P/E analysis returns a range of $8.68 to $10.25 with a mid-point of $9.47.
