Choice International Limited analyst Q&A

Thank you very much, sir. The first question comes from the line of Bimal Panchal from Bimal Panchal & Associates. Please go ahead.

Good afternoon. At the outset, heartiest congratulations for a robust performance and very good optimism you have given in this opening speech. I don’t have much question s, but just wanted to know what is the scope of the Choice Consultancy Servic e and the scope of activities in this Rs. 140 Cr worth projects? What we are going to do?

Thank you for joining in. Basically, in Choice Consultancy, there are various advisory services largely concentrated towards the government clients, where we assist government in execution of various infrastructure and non-infrastructure projects. There are projects where we assist various state governments in developing the MSME sector for the state. For example, government has engaged Choice Consultancy Service to conduct financial awareness programs across states for the MSME sector ; specifically, on how the MSMEs can take the benefit of various government schemes which are specifically aligned towards the credit availability to the MSMEs and various subsidies which are being made available by the government to the MSMEs. We conduct such programs across states and conduct this financial awareness drive where we invite the MSMEs, train them on various credit schemes, as well as subsidy schemes available to the MSMEs specifically from the state, as well as the central government and then assist them in obtaining those services as well. This is one of the examples of a project. There are another project of project management units also where government executes large programs across states, as well as multi -state programs are also conducted by the central government. We act as the project management unit for those larger programs and provide the complete hand-holding to the government with the monthly, weekly, quarterly updates on the projects and ensuring the timely completion of those projects. So. these are the kind of projects which we conduct in line along with the government across India.

Okay. Thank you, sir. One more question for Choice AMC, what is the likely date of launching our mutual funds and what kind of a scheme that we are going to do? Are we doing all kinds of mutual schemes or some hedge funds or pricing funds ? What kind of scope we are going to launch?

In Q3, we are launching Gold ETF and the date for the first NFO is 24th of October 2025. In the next quarter, we are planning to go for Silver ETF and in FY27, we will come up with the passive strategies, as well as active strategies both. So . that is the way forward on the timelines. Obviously, these timelines are subject to various market factors and the regulatory approvals which are required.

The next question comes from the line of Rahul Sharma with Finvest.

I just want to know , what is your vision for the AMC business that we have recently got the license for and how are we planning to enter the market with already established players? A follow-up question to that like can you just elaborate on the strategy further as in what kind of AUM are you targeting from the Gold ETF this year?

Yes, Good evening. As per the target of the Gold ETF, initially we are targeting at least around Rs. 200 Cr in NFO and then as the market grows and we penetrate to the branch network and digital marketing channels, we'll expand this going forward.

Okay, sir. Thank you so much. That was it from my side.

Okay. Thank you, Rahul.

Thank you. The next question comes from the lin e of Urmish Shah from Moneywisers. Please go ahead.

Yes, I had one question on the insurance business. If I see your presentation in the corporate vertical, we have seen a decline YoY of 31%. Any reason could you give?

Corporate business is with limited number of clients and there has been one contract which we could not renew during the quarter because of which we have seen a decline ; but on an overall strategy perspective, when we look our pipeline for the further corporate policies which we are going to issue and where we are at the advanced stage, we are very much confident that we will fill this gap in the Q3 FY26 in the corporate insurance.

Okay. In the NBFC business also a slight drop in NIM has been observed. Is this NIM margin maintainable for the full year?

On the NBFC, the NIM has slightly dropped largely because we have not been doing the unsecured loans where higher rate of interest is earned. Largely, our focus is on the secured loan portfolio which has lower rate of interest. So, because of which there has been a slight reduction. However, we are hopeful that we will be able to maintain 10% - 11% kind of NIM numbers in the medium term timelines.

Right. One final question, Sir. The revenue per branch for H1, if you could give some color?

We have the revenue numbers and we have the branches numbers as we ll. I do not have that number handy with me right now.

Okay. Since in the presentation it is mentioned that we are going to open 100 new branches by end of FY26, where we are currently standing after H1 and how is it going forward, the pipeline?

Specifically on the b roking business, we have opened 35 new branches during this particular half of the year. We are very much on track to complete the 100 new branches target for this remaining half of the year. I mean the 100 total for this financial year.

Yes. Okay, Sir. Thank you and all the best.

The next question comes from the line of Jayshree Bajaj with Trinetra Asset Managers. Please go ahead.

Good afternoon, sir. Thank you for the opportunity. My question is the company secured new strategic projects worth Rs. 1,303 Mn in Q1 FY26, including the MahaSTRIDE Program in Maharashtra and mandates for PACS in Bihar and Karnataka. What is the anticipated revenue recognition timeline for these specific projects and how will they enhance future recurring business?

Okay. These projects have an average timeline of 24 months to 36 months’ time. So, this revenue will be staggered over the 24 months to 36 months timeline. All these projects have a mixed kind of invoicing pattern where we are eligible to raise some amount as monthly invoicing and some are milestone based invoicing. However, the complete project cycle is 24 months to 36 months’ time where these will be completed and complete revenue will be recognized as revenue in our profit and loss account. Moreover, on the pipeline perspective, we have already bid on multiple projects, similar projects, where we are expecting the outcomes of tenders during Q3. We are hopeful that we'll keep on adding to our overall order book during this quarter and the next quarter as well.

Thank you, Sir. That's all from my side.

Thank you. The next question comes from the line of Shreyansh an Individual Investor. Please go ahead.

Hi, everyone. Congrats on the quarter. My question was on the brokerage front. From an industry perspective, what more could get worse from here ; say weekly expiring pending could be one. What else could go wrong? We also saw Nithin Kamath also voicing his concerns on the same. If you could also highlight what the corresponding impact on Choice can be?

Okay. From the Choice’s perspective first, we are largely on to retail segment. Specifically in retail, we have a higher cash contribution instead of derivatives contribution when we compare ourselves to the industry numbers , because of which we do not foresee a major impact of the regulatory changes. Of course, there are certain impact in the overall industry and we will also face certain headwinds. However, we are very much confident that we will be at a better position compared to the industry while looking at our business model.

Just as a follow up there, what else do you think could get bad from here, from an industry perspective?

I mean, we don't foresee anything going wrong from here. It's only a positive upward trend which we foresee from here.

Thank you. The next question comes from the line of Mandira with Investo. Please go ahead.

Thank you for the opportunity, sir. The NBFC business is growing very rapidly. How are we managing collection when entire industry is suffering?

Thank you, Mandira. In the NBFC specifically we have a dedicated in -house collections team. So, our business is also on the physical model wher e we have the physical branches and w e source the clients through physical branches channel only. Therefore, it is inevitable that we have a physical collections team as well on the ground, which is completely in-house, where we keep a close track to ensure the timely collections. There are various initiatives which we have taken, which includes the pre -EMI calling and awareness calling to the customers, which starts three days in advance from the EMI due date to make sure that the customer is aware that EMI is going to hit and he maintains the bank balance in their bank account. So, these are the kind of initiatives which we are taking to ensure t he timely collections in the NBFC business.

Got it, Sir. How are we different compared to other players?

There are various initiatives where we don't have any physical kind of movement of papers except the original property papers, everything is done through a digital journey which is helping us in keeping our operating costs low compared to other companies at our size, which is something which is different. Secondly, our customer segment is that where, in truest sense we are doing the financial inclusion where people are having low documented income proofs and low access to the credit. So, that’s how we separate ourselves from the other companies in the market.

That's very helpful. Thank you.

Thank you, Mandira.

Thank you. The next question comes from the line of Shruti Sharma, an Individual Investor. Please go ahead.

Thank you for the opportunity. So , I have two questions. What is the vision with respect to demerging the broking entity?

Thank you, Shruti. Currently we don't have any immediate plans to demerge the broking business. It is going to continue as a subsidiary of Choice International in the medium term from here.

Yes. On the expansion phase, we have already discussed that branch expansion is one of the targets and on the acquisition also, we are open to discuss opportunities with various other players in the industry who w ants to consolidate with Choice a nd we are currently right now also, we are actively in discussion with a couple of such companies.

Okay. Thank you so much, sir. That's all from my side.

Thanks, Shruti.

Thank you. The next question is from the line of Sanaya Jain, an Individual Investor. Please go ahead.

I just had like two questions. First, how are you all planning to phase out the passive and active strategy launches in FY27?

I will request Ajay Sir to take over this question.

Yes. On the passive strategy, first we are targeting the passive strategies only. So, once we are settled down wit h passive in the next one year , we will start active also in FY27. The initial phase through we are going with passive only.

Okay. When do you expect the AMC business to break even?

We expect not more than three years. In two to three years, we will come on the break even.

Okay. Great sir. Thank you so much.

Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for their closing comments.

Thank you for joining us today. The first half of FY26 has been steady and we remain focused on sustaining this progress while serving our customer and strengthening our operations. We appreciate your continuing interest in Choice International and look forward to connecting with you again next quarter. Wishing a very good day and a very happy and prosperous Diwali to all of you. Thank you.

Thank you. On behalf of Choice International Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. (This document has been edited for readability purposes.)