Choice Intl. Q2 FY27 Results (NSE: CHOICEIN)
Signal: Earnings grew
The read
The quarter extends Choice's high-growth trajectory with record revenue of ₹3,729 million, up 36% YoY, supported by 14% growth in demat accounts to 13.78 lakh and a ₹710 crore government-advisory order book; however, EBITDA margin fell 37bps to 34.47% and PAT growth of 23% lagged revenue as employee costs rose 45% and finance costs 49%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹372.9 Cr | 36% | N/A |
| Net profit | ₹69.5 Cr | 23% | |
| EBIT margin | 34.47% |
P&L walk
Revenue increased 36% YoY to ₹3,729 million, but EBITDA grew 32% to ₹1,306 million and margin narrowed 37bps to 34.47% as employee costs rose 45% and finance costs 49%; PAT rose 23% to ₹695 million.
Key positives
- Revenue reached a record ₹3,729 million, up 36% YoY, while EBITDA increased 32% to ₹1,306 million.
- Broking scale expanded with demat accounts up 14% YoY to 13.78 lakh, assets under custody at ₹66,300 crore and the MTF book at ₹463 crore.
- Wealth momentum broadened: equity mutual-fund AUM rose 49% YoY to ₹3,013 crore, while PMS and AIF AUM increased 127% to ₹291 crore.
- Government advisory order book stood at ₹710 crore and the IPO pipeline included 24 mandates representing estimated fundraising of ₹6,210 crore.
- NH Investment & Securities completed the ₹900 crore investment in Choice Equity Broking, providing capital intended primarily for MTF expansion.
Key concerns
- EBITDA margin contracted 37bps YoY to 34.47% despite 36% revenue growth, indicating that growth is not yet translating into incremental operating margin.
- Employee benefit expenses rose 45% YoY to ₹1,121 million, 9 percentage points faster than revenue.
- Finance costs increased 49% YoY to ₹306 million, while depreciation rose 56% to ₹62 million, causing PAT growth of 23% to trail EBITDA growth of 32%.
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