Metrics cut 2
- IPPB integration timeline delayed to end of August 2026 (from earlier communicated timelines); customer onboarding shifted to September 2026
- Revenue guidance for IPPB partnership deferred until initial volumes visible from September 2026 (previously expected to be provided)
Event Participants
Executives
3 Arun Kumar Poddar, Ashmi Shah, Ayush Sharma
Analysts
8 Ajay Badgujar, Anirudh Sharma, Dhanraj Tolani, Mann Dhadhi, Nachiket Kale, Raghav, Samruddhi Bane, Vivek
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹319 crores | +34% YoY, +1.6% QoQ; driven by broking (59%), advisory (28%), NBFC (13%) segments |
| EBITDA | ₹114 crores | Margin 35.75%; cost discipline supporting profitability |
| Profit After Tax | ₹61 crores | +26.37% YoY; margin at 19%; flat QoQ for third consecutive quarter |
| Stock Broking AUM | ₹62,226 crores | +30% YoY; cash delivery focus driving revenue quality and stability |
| Wealth AUM | ₹4,961 crores | Supported by continued delivery-led product participation |
| DMAT Accounts | 12.94 lakh | +13% YoY; aided by improved onboarding and broader product suite |
| Insurance Premium | ₹80 crores | +5% YoY; policy volume at 67,828, +73% YoY, driven by partner network expansion and digital adoption |
| NBFC Loan Book | ₹836 crores | Contributed 13% of revenue; focused on secured lending - MSME, micro-LAP, rooftop solar |
| GNPA | 3.78% | Improved from prior quarter; result of in-house collections team effectiveness |
| NNPA | 2.74% | Improvement driven by recoveries through internal collections team |
| NIM | 11.10% | Consistent with preference for secured exposures |
| Consulting Order Book | ₹777 crores | Across digital tax and multilateral support initiatives; provides 2-3 year visibility |
| Government Mandates | ₹191 crores | Recent wins via consulting subsidiaries for e-governance, infrastructure, project management |
| IB Pipeline | ₹6,766 crores | 30 mandates under execution; 1 IPO completed in quarter |
| CHOICE Business Associates | 70,000 | Complement digital distribution capability and expand market reach |
Geographic & Segment Commentary
Broking & Distribution: Revenue of ₹197 crores (59% of total revenue) with PBT of ₹48 crores. Stock broking AUM growth of 30% YoY supported by cash delivery focus, while DMAT base grew 13% YoY to 12.94 lakh clients. Per-client activity deepening through cross-selling of insurance and wealth offerings on the platform.
NBFC/Lending: Revenue of ₹45 crores (13% of total) with loan book at ₹836 crores. Asset quality held firm with GNPA at 3.78% and NNPA at 2.74% on the back of prudential underwriting and in-house collections. NIM maintained at 11.10%; growth focused on secured lending across MSME, micro-LAP, and rooftop solar financing.
Advisory/Consulting: Revenue of ₹91 crores (28% of total) with order book of ₹777 crore providing multi-year revenue visibility. Recent government mandates of ₹191 crore added across e-governance, infrastructure, and project management. IB vertical active with 30 mandates and ₹6,766 crore pipeline.
Company-Specific & Strategic Commentary
NH Investment & Securities Partnership: ₹900 crore investment in Choice International Ltd announced for Q2 FY27; capital to be deployed toward MTF portfolio and settlement funds. Strategic synergies extend beyond capital - access to NHIS institutional clients globally, Southeast Asian market presence (Korea, Hong Kong, Singapore), and cross-border investment banking deal flow.
AMC Expansion: CHOICEIN received ABE approval as investment manager for Wealthware Capital Trust, a Cat II AIF (pre-IPO focused) sponsored by Choice. AMC strategy focused on passive schemes in FY27 with active schemes planned by year-end; target for meaningful growth from FY28.
IPPB Partnership: Integration with India Post Payments Bank nearing completion (expected end of August 2026); customer onboarding to commence from September 2026. Exclusive nature of partnership expected to drive significant customer acquisition onto wealth management platform.
Branch Expansion: On track for 300-350 branches by March 2027 (from current ~210-220), with 800 branches targeted over 3-4 years. Team finalization underway at new locations.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 50% CAGR for next financial year | Supported by NH Investment capital deployment (Q3 onwards), IPPB partnership rollout, and advisory order book execution |
| Segment Mix | 50% broking, 40% advisory, 10% NBFC (next 2 years) | Shift driven by advisory growth including investment banking clubbed into advisory segment |
| Solar Financing AUM | ₹150 crores by end FY27 | High competition market; lending maintained at ~15% customer ROI; equipment serves as collateral |
| AMC Breakeven | 2-3 year timeline | Active schemes launch by end FY27; growth phase begins FY28 |
| Branch Count | 300-350 by March 2027 | 800 branches targeted over 3-4 years; teams finalized at new locations |
| NBFC Loan Book Growth | 20-30% expected | Secured lending focus maintained; proprietary credit engine + physical verification framework |
| NH Investment Funds | Received in Q2 FY27 | Deployment toward MTF portfolio and settlement funds; growth visible from Q3 onward |
| Advisory Net Margin | ~20% maintained | Government advisory margins expected stable as order book mix shifts toward IT/consulting projects |
Risks & Constraints
| Risk | Context |
|---|---|
| Flat QoQ Performance | Revenue has been flat around ₹300 crores and PAT around ₹60-70 crores for three consecutive quarters (Q3 FY26-Q1 FY27). Management attributes this to market seasonality and expects growth kick-in from Q3 FY27 after NH capital deployment. |
| NBFC Return Drag | NBFC segment delivers lower ROE compared to broking, consuming working capital. Management expects higher ROI within a year as portfolio scales, but timeframe remains a watch item. |
| Solar Financing Competition | Highly price-competitive market; management maintaining 15% customer ROI discipline and targeting ₹150 crore AUM by FY27-end. Competitive pressure could constrain growth or margins. |
| AMC Profitability Uncertainty | AMC business in setup phase with no breakeven guidance on AUM scale; profitability expected in 2-3 years, representing long capital lock-up period. |
| IPPB Integration Delays | Integration expected by end of August 2026 with onboarding from September - delayed from earlier communicated timelines; revenue guidance deferred until initial volumes visible. |
| Market Seasonality | QoQ variability attributable to capital market conditions; dependency on favorable IPO windows for IB conversion of ₹6,600+ crore pipeline over 1-1.5 years. |
Q&A Highlights
NH Investment Partnership & Capital Deployment
- Question: Beyond capital infusion, what strategic value does NH Investment bring - overseas access, client reach, product distribution? (Nachiket Kale)
- Answer: Capital is the smallest part of the transaction. NHIS's core strengths in institutional businesses globally, especially Southeast Asian markets (Korea, Hong Kong, Singapore) and US presence, will enable integration of institutional clients with Indian market activities. IB deal flow across jurisdictions is another synergy area. (Ayush Sharma)
- Question: What incremental ROE/capital return is targeted from this capital? (Nachiket Kale)
- Answer: Deployment will be toward MTF portfolio and settlement funds per regulatory guidelines. Increased interest income plus brokerage on higher client trading activity will drive additional profitability. Internal accruals fund existing expansion needs. (Ayush Sharma)
NPA Improvement Drivers
- Question: How much of NPA improvement is driven by recoveries vs upgrades? (Samruddhi Bane)
- Answer: Improvement is wholly driven by collections from in-house collections team. Once cases slip from sales team control, they're allocated to the internal collections team, which executes all recoveries. (Ayush Sharma)
NBFC Growth & Asset Quality
- Question: With 20-30% AUM growth expected, how will credit quality be maintained? What's the secured/unsecured mix in incremental book? (Samruddhi Bane)
- Answer: Fully focused on secured lending only - all loans collateral-backed. Proprietary credit assessment engine runs primary check, followed by mandatory human intervention: ground physical verification plus central team reconciliation. This dual layer maintains asset quality through the growth cycle. (Ayush Sharma)
Sequential Profitability Decline & Advisory Margins
- Question: EBITDA and PAT declined sequentially - was this seasonality or timing? How will advisory order book mix changes affect margins? (Vivek)
- Answer: Advisory mix will shift from heavy infrastructure advisory toward governance framework, IT consulting, and project management assignments. Net margin of ~20% in government advisory maintained as scale grows. (Ayush Sharma)
Solar Financing Details
- Question: Solar financing is collateral-free - what were Q1 disbursements, AUM, and how does yield/cost compare to MSME book? (Vivek/Anirudh Sharma)
- Answer: Solar is actually a secured product - solar equipment serves as collateral and can be repossessed in case of delinquencies. Weighted ROI maintained at 17-18%, targeted to come down to ~15%. Target AUM of ₹150 crore by end FY27. High price competition, but management doesn't compromise on ROI. (Ayush Sharma)
AMC Monetization & Mutual Fund Distribution
- Question: What's the AMC revenue contribution roadmap and AUM scale for meaningful profitability? (Anirudh Sharma)
- Answer: AMC is a long-term venture. FY27 focus on passive schemes with active schemes launching by year-end, growth phase from FY28. Mutual fund distribution AUM growing 30-35% YoY. Breakeven targeted in 2-3 years though no specific AUM guidance given. (Ayush Sharma)
Merchant Banking Pipeline & AIF
- Question: What's the pipeline conversion status and Cat II AIF corpus/investment strategy? (Mann Dhadhi)
- Answer: Hybrid fee arrangement - portion during preparatory phase, rest post-IPO completion. Mandates totaling ~₹6,600 crore expected to complete over 1-1.5 years as market permits. AIF is pre-IPO focused, first fund sponsored by Choice, with other strategies in development. (Ayush Sharma)
IPPB Partnership & Revenue Expectations
- Question: Revenue timing from IPPB partnership and expected numbers. (Raghav)
- Answer: System integration with IPPB completing by end of August; onboarding starts September 1. Revenue guidance only after initial volumes visible from September. Given exclusive partnership nature, expects large customer chunk onto wealth management platform. (Ayush Sharma)
QoQ Growth Timeline & NH Capital Receipt
- Question: Revenue/PAT flat for 3 quarters - when will QoQ growth resume? When is NH money received? (Raghav)
- Answer: NH investment received in Q2 itself. Growth from capital deployment visible from Q3 onwards. FY26 PAT base of ~₹236-237 crores will grow tremendously this year, with expectation of another 50% growth next financial year. (Ayush Sharma)
NBFC Segment ROE Drag
- Question: Does NBFC act as a drag given lower returns vs broking/consulting? (Raghav)
- Answer: ROE is higher in broking, hence largest capital allocation there. From diversification perspective, smaller capital in NBFC. Within a year, NBFC will start delivering higher ROI as portfolio scales and milestones are achieved. (Ayush Sharma)
Segment Mix Guidance & Branch Expansion
- Question: Guidance on segmental businesses over next 2 years? Branch opening progress vs earlier target? (Ajay Badgujar, Raghav)
- Answer: Mix expected to shift to 50% broking, 40% advisory, 10% NBFC over 2 years - advisory grows including IB, broking also grows. On branches: teams finalized at locations, opening as current employments conclude. Targeting 300-350 branches by March 2027, on track for 800 in 3-4 years. (Ayush Sharma)
Key Takeaway
Choice International reported Q1 FY27 revenue of ₹319 crores (+34% YoY), EBITDA of ₹114 crores (35.75% margin), and PAT of ₹61 crores (+26% YoY), though QoQ growth remained flat for a third straight quarter. Strategic priorities centered on the ₹900 crore NH Investment & Securities partnership (capital received in Q2, deployed toward MTF and settlement funds with institutional business synergies across Southeast Asian markets), IPPB exclusive partnership onboarding from September 2026, and advisory order book of ₹777 crore providing 2-3 year revenue visibility. Segment mix targeted to shift to 50% broking, 40% advisory, 10% NBFC over two years, with 300-350 branches expected by March 2027. Management guided to 50% CAGR for next financial year driven by NH capital deployment, IPPB rollout, and advisory execution. Watch points include flat QoQ momentum turnaround trajectory from Q3, NBFC ROE improvement within one year, solar financing competitive pricing at ₹150 crore AUM target, and AMC breakeven over 2-3 years.