🟢 1. At a Glance
Choice International Ltd (CIL) is a ₹14,000 Cr market cap financial services company offering broking, NBFC, infra advisory, and more. With 66% PAT CAGR over 5 years and a 47% sales CAGR, it’s been compounding like a beast. But a P/E of 89x, 100% promoter share pledge, and working capital gymnastics raise eyebrows. Is this India’s next fintech empire, or a richly priced mirage?
🏦 2. Hook – “Your Broker’s Broker Just Went Full Bajaj Finserv (Kinda)”
Let’s get one thing clear – Choice isn’t just a broker anymore. It’s an empire-in-the-making.
They’re building:
- A Mutual Fund AMC
- An NBFC growing via acquisitions
- A digitization contractor for public sector infra
- An investment bank
- A robo-advisory cum AI-led fintech arm
Basically, they’re throwing the entire NSE startup expo into one listed company. So far, it’s working—revenues grew from ₹134 Cr in FY17 to ₹910 Cr in FY25. But can they keep it together?
📦 3. WTF Do They Even Do?
Choice is a diversified financial services group offering:
🏦 Core Segments:
- Broking & Distribution (Choice Equity Broking)
- NBFC Lending (Choice Finserv – retail lending biz from Paisabuddy + Sureworth)
- Investment Banking & Advisory (Infra, PPP models, Govt projects)
- Wealth & Mutual Fund (Received SEBI approval for Choice AMC)
- Digitization Projects (Digitizing land records, public infra systems)
🛠️ Subsidiaries & Expansions:
- Choice AMC Pvt Ltd (New MF arm)
- Choice Finserv Pvt Ltd (Acquisitions galore in NBFC space)
- Choice Consultancy Services (Public sector infra consulting)
📈 4. Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 176 | 285 | 393 | 756 | 910 |
| Net Profit (₹ Cr) | 17 | 54 | 60 | 131 | 163 |
| OPM (%) | 23% | 32% | 27% | 30% | 31% |
| ROCE (%) | 10% | 17% | 16% | 25% | 22% |
| ROE (%) | 10% | 19% | 19% | 19% | 19% |
| EPS (₹) | 1.17 | 2.69 | 3.02 | 6.56 | 7.84 |
🧠 TL;DR:
- 3Y Revenue CAGR: 47%
- 3Y PAT CAGR: 43%
- ROEs consistently improving
- OPMs stabilizing ~30% (very strong for finance)
💸 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| P/E (TTM) | 89.4x 😳 |
| P/B | 13.6x |
| Market Cap | ₹13,992 Cr |
| Book Value | ₹51.5 |
| PEG Ratio | ~1.3 (using 66% profit CAGR) |
🎯 Fair Value Range (FY26 EPS ~ ₹10):
- At 25x P/E: ₹250
- At 40x P/E: ₹400
👉🏽 EduFV™ Range: ₹250 – ₹400
Current CMP: ₹701 → 🔥 priced like a fintech unicorn, not a broking house
🔥 6. What’s Cooking – News, Triggers, Drama
🔑 Growth Triggers:
- 🏦 Mutual Fund license → cross-sell D2C wealth stack
- 📈 Acquisitions spree → Arete Capital, Paisabuddy, Sureworth, Choice Insurance
- 🏗️ Govt digitization projects worth ₹130 Cr+ in last 6 months
- 🌞 45MW solar project via subsidiary
🚨 Red Flags:
- 100% promoter shares pledged as of Oct 2024
- Massive valuation rerating: stock is up 90% CAGR over 5 years
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹200 Cr |
| Reserves | ₹828 Cr |
| Borrowings | ₹463 Cr |
| Other Liabilities | ₹1,129 Cr |
| Total Assets | ₹2,619 Cr |
| D/E Ratio | ~0.55x |
✅ Leverage manageable
❌ But capital needs rising with expansion
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹138 Cr | -₹48 Cr | -₹29 Cr | ₹62 Cr |
| FY24 | -₹148 Cr | -₹18 Cr | ₹224 Cr | ₹58 Cr |
| FY25 | -₹294 Cr | -₹161 Cr | ₹449 Cr | -₹6 Cr |
🔻 FY25 = cash guzzling mode activated for acquisitions
⚠️ Needs to convert that into actual returns soon
📊 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 21.6% |
| ROE | 18.9% |
| OPM | 31% |
| P/B | 13.6x |
| Debtor Days | 110 |
| WC Days | 147 |
| Promoter Pledge | 100% ⚠️ |
📌 Financials great, but valuation frothy and pledge alert serious
💰 10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | OPM |
|---|---|---|---|---|
| 2023 | ₹393 Cr | ₹107 Cr | ₹60 Cr | 27% |
| 2024 | ₹756 Cr | ₹225 Cr | ₹131 Cr | 30% |
| 2025 | ₹910 Cr | ₹285 Cr | ₹163 Cr | 31% |
- Growth from NBFC lending, infra advisory, and broking
- Infra biz margins slightly lower but scale massive
- Cross-sell potential with AMC + broking + MF = huge
🧑🏫 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | ROCE | Rev (₹ Cr) | PAT (₹ Cr) | P/B |
|---|---|---|---|---|---|---|
| Bajaj Finserv | 36x | 13.4% | 11% | 1,33,822 | 8,885 | 4.5x |
| Edelweiss Fin | 27x | 8.7% | 13% | 9,081 | 399 | 2.5x |
| JM Financial | 21x | 8.5% | 9.4% | 4,378 | 774 | 1.6x |
| Choice Intl | 89x | 18.9% | 21.6% | 910 | 163 | 13.6x 😬 |
📌 Great fundamentals, insane valuation vs peers
🧑💼 12. Miscellaneous – Shareholding, Promoters, KMP
| Group | Mar 2023 | Jun 2025 |
|---|---|---|
| Promoters | 55.3% → 56.4% ✅ | |
| FIIs | 15.1% → 14.1% | |
| DIIs | 0.0% → 0.19% | |
| Public | 29.6% → 29.2% |
🧾 Promoters increased stake in FY23
🚨 But full pledge = 🚩
👨💼 KMP:
- MD: Kamal Poddar
- Group expansion being led aggressively with frequent M&A
🧑⚖️ 13. EduInvesting Verdict™
Choice International is trying to become India’s next financial super app company. From stock broking to NBFC to AMC to infra consulting – they’ve stitched together a fast-growing, high-margin empire.
BUT… the market’s already priced in fintech god-mode with 89x earnings and 13x book value.
⚠️ If growth slows even slightly, re-rating will hurt
⚠️ 100% promoter pledge = major risk
✅ Still delivering 🔥 numbers, big expansion plan, and public sector tailwinds
🎯 Fair Value Range: ₹250 – ₹400
CMP: ₹701 = Definitely “premium stitched”
✍️ Written by Prashant | 📅 09 July 2025
Tags: Choice International, NBFC, broking stocks, fintech, AMC, mutual fund license, EduInvesting, public sector infra, high PE, promoter pledge risk
