Choice International Limited

Financial Services — Capital Markets · NSE

₹739.00+₹3.00 (+0.41%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Choice International Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Choice International Limited, together with its subsidiaries, provides various financial services in India. It operates through Broking & Distribution Services, Advisory Services, and NBFC Services segments.

IndustryCapital Markets

SectorFinancial Services

Employees5,258

Annual revenue₹1,121 Cr

How does it make money?

Turns over ₹1,121 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹38 left at the operating level before interest, tax and depreciation. Each of its 5,258 employees supports ₹21.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin37.8%

Net margin19.4%

Revenue / employee₹21.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC LIFE INS CO LTD, SBI LIFE INSURANCE CO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC LIFE INS CO LTDP/E 58.4x · ROE 11.3%

SBI LIFE INSURANCE CO LTDP/E 63.9x · ROE 13.7%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE17.6%

ROE13.0%

Peer median ROE13.7%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +188% while net margin moved +26% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+188%

Margin effect+26%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 64.4x is demanding — it needs sustained high growth to justify
✓ P/E is 29% below its own historical median of 90.1x — cheap by its own standards
✗ P/B of 8.74x is a steep premium to book

Quality vs. Valuation

Company Quality

78/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

54/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

64.4x

3Y Median

90.1x

40 monthly readings · mean 90.4x · range 60.4x–132.6x

Sector Median

58.4x

median of 3 sector peers

🟢Current valuation is approximately 29% below its 3y median of 90.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 58.4x.

vs. its own history

Cheap

90.1x median over 40 months · -29%

vs. sector peers

Fair

58.4x median of 3 peers · +10%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

64.4x

P/B

8.74x

EV/EBITDA

40.6x

PEG

1.20

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 28.9% to 37.8% over 3 years.
Valuation below its historical average
At 64.4x the stock trades 29% below its own median of 90.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 278% against revenue growth of 188% — customers are taking longer to pay.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 28.9% to 37.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 29% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 32% a year✓ 42.3% CAGR
Latest reported year was 34.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 36%✓ 37.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 11%✓ 13.0%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 4x✓ 4.7x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 90.1x✓ 64.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹16,463 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

64.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.74x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹11.48

Profitable

Profitable on a per-share basis

ROE

13.0%

Moderate

Moderate capital efficiency

ROCE

17.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.50x

Low

Conservative leverage

Revenue Growth (YoY)

34.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹369 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹739

P/E (Forward)

49.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

27.4%

Good

Healthy core-business profitability

Net Margin

20.2%

Good

Strong bottom-line conversion

Current Ratio

2.06

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.29

Defensive

Steadier than the market

52W Range Position

58%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

738.9 / 767.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹389 Cr	₹750 Cr	₹910 Cr	₹1,121 Cr	+42.3%
EBITDA	₹112 Cr	₹225 Cr	₹293 Cr	₹423 Cr	+55.6%
EBITDA Margin	28.9%	30.0%	32.2%	37.8%	—
PAT (Net Profit)	₹60 Cr	₹131 Cr	₹157 Cr	₹218 Cr	+53.6%
EPS	₹3.01	₹6.52	₹7.69	₹10.27	+50.6%
ROE	12.6%	20.7%	15.2%	13.0%	—
ROCE	16.9%	24.6%	19.9%	17.6%	—
Total Debt	₹207 Cr	₹473 Cr	₹679 Cr	₹908 Cr	+63.8%
Free Cash Flow	₹91 Cr	-₹169 Cr	-₹451 Cr	-₹369 Cr	—

🟢 Revenue has grown at 42.3% a year over 3 years.

🟢 EBITDA has grown at 55.6% a year over 3 years.

🟢 EBITDA Margin has risen from 28.9% to 37.8% over 3 years (+8.9 pts).

🟢 PAT (Net Profit) has grown at 53.6% a year over 3 years.

🟢 EPS has grown at 50.6% a year over 3 years.

🟡 ROE has held roughly flat at 13.0% over 3 years.

🟡 ROCE has held roughly flat at 17.6% over 3 years.

🔴 Total Debt has grown at 63.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹91 Cr to -₹369 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,566 Cr

Total Liabilities

₹1,742 Cr

Total Debt

₹908 Cr

Cash & Equivalents

₹194 Cr

Operating Cash Flow

-₹267 Cr

Capex

-₹102 Cr

Shareholding (proxy)

Institutional Holding

10.7%

Insider Holding

60.1%

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC LIFE INS CO LTD	58.4x	11.3%
SBI LIFE INSURANCE CO LTD	63.9x	13.7%

Recent News

1 positive3 mixed2 general

Choice International Share Price: 7 Stock Signals to Watch Now

Univest, 05 Oct

Choice International Ltd Upgraded to Hold on Improved Technicals and Strong Financials

MarketsMojo, 13 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Choice International Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Choice International to host analyst meet on September 28, 2026

scanx.trade, 28 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Up 70% in 2026, yet Choice sees another 22% rally; initiates coverage with ‘Buy’. Check target price and stop-loss

Livemint, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Choice International shares surge on announcing partnership with South Korean financial institution

Upstox, 09 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.9/20

🟢Financial HealthStrong17/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong10.9/15

🔴ValuationDemanding6.7/15

🟡RiskModerate5/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 32% a year42.3% CAGR
✓EBITDA margin holds above 36%37.8%
✓Return on equity stays above 11%13.0%
✓Interest cover stays above 4x4.7x
✓Valuation vs its own median of 90.1x64.4x today