During Wednesday’s trading session, the shares of one of the leading financial services companies operating across India surged nearly 3 percent to Rs. 487.4 on BSE, after the company reported Q2 FY25 financial results and expansion plans.
With a market cap of Rs. 9,597 crores, at 11:24 a.m., the shares of Choice International Limited were trading in the green at Rs. 481.35, up by nearly 1.7 percent, compared to its previous closing price of Rs. 473.3.
What’s the news:
The fluctuations in the share prices were observed after Choice International Limited announced the financial results for Q2 FY25, through the latest filings with the stock exchanges on Tuesday during post-market hours.
For Q2 FY25, Choice International reported consolidated revenue from operations of Rs. 247 crores, reflecting a rise of around 23 percent QoQ from Rs. 201 crores in Q1 FY25, as well as a growth of about 29.3 percent YoY from Rs. 191 crores in Q2 FY24.
The company’s net profit for Q2 FY25 increased to Rs. 46 crores, representing a significant growth of around 44 percent QoQ from Rs. 32 crores in Q1 FY25 and a year-on-year increase of nearly 53.3 percent from Rs. 30 crores in Q2 FY24.
EBITDA for Q2 FY25 stood at Rs. 78 crores, representing an increase of around 51 percent YoY from Rs. 52 cores in Q2 FY24, with an EBITDA Margin of 31 percent, up from 27 percent, during the same period.
Q2 FY25 Business Highlights:
The stock broking business of Choice International has added 40,000 demat accounts, bringing the total to 9.31 lakhs demat accounts, a growth of 21 percent YoY. The company’s stock broking division has experienced substantial growth, with a strong focus on user retention and expansion into Tier III cities and beyond.
Further, assets under management (AUM) for stock broking stood at Rs. 43,500 crores, a staggering growth of 40 percent YoY, while AUM for wealth products reached at Rs. 1,127 crores, marking a substantial YoY growth of 129 percent. This significant growth is attributed to enhanced cross-selling efforts, driven by our extensive portfolio of products in this business segment.
In Q2 FY25, the insurance premium generated by Choice International amounted to Rs. 64 crore, representing a 31 percent YoY increase, while the number of policies sold reached 68,866, a surge of 687 percent YoY.
The total loan book for the NBFC segment at the end of Q2 FY25 was Rs. 458 crore, with the retail loan book for the same period standing at Rs. 308 crore, and net non-performing assets (NNPA) as of September 30 was 1.45 percent.
Additionally, the company’s advisory segment order book totalled Rs. 550 crores.
Expansion Plans:
According to the 22nd October regulatory filings with the stock exchanges, Choice Finserv Pvt Ltd, the NBFC arm of Choice International Limited, announced the acquisition of the retail lending business of Paisabuddy Finance Private Limited and Sureworth Financial Services Private Limited.
This strategic acquisition is poised to enhance Choice Finserv’s footprint in the retail lending sector and increase its assets under management (AUM). The transaction will be executed as a slump sale, pending the necessary approvals.
The acquisition includes the retail loan portfolios, team size, operations, and infrastructure of both the Jaipur-headquartered companies.
Paisabuddy Finance, an established MSME lender, will contribute a portfolio of Rs. 278.54 crore AUM, while Sureworth Financial Services, which specializes in MSME and affordable housing loans, will add Rs. 65.38 crore AUM to Choice Finserv. This brings the total AUM to Rs. 801.6 crore, including off-book AUM.
The acquisition also aligns with Choice Finserv’s commitment to sustainable finance, as the company plans to expand its green finance initiatives, including funding for rooftop solar projects and EVs.
The integration will expand Choice Finserv’s branch network from 71 to 168 locations across Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Uttar Pradesh and Delhi NCR, while increasing its workforce from 536 to 1,180 employees.
This will strengthen the company’s capacity to serve underserved markets with targeted MSME lending and retail loan products.
Stock Performance:
The stock has delivered multibagger returns of nearly 134.5 percent in one year, and around 46 percent returns in the last six months. So far in 2024, the shares of Choice International have given multibagger returns of about 105.5 percent.
About the company:
Incorporated in 1993, Choice International Limited, an integrated and diversified financial services group, is engaged in providing a wide range of financial services including broking & distribution, investment banking, financial services to business advisory, regulatory compliances, retail loan distribution, mutual fund distribution, technical services, and other ancillary services.
Written by Shivani Singh
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