Choice International – A Stock Broking Co with Promising Growth Prospects

A comprehensive Financial Services Portfolio in place

Choice International Limited is a prominent India-based financial services company offering a broad spectrum of products and services through its three primary segments:

1. Broking & Distribution Services:

   • Services include stock broking, wealth management, and insurance.

   • Offerings encompass mutual funds, structured products, fixed-income solutions, and corporate treasury advisory for high-net-worth individuals (HNIs).

2. Non-Banking Financial Company (NBFC) Services:

   • Focuses on MSME loans, solar financing, supply chain finance, vehicle loans, and personal loans.

3. Advisory Services:

   • Specializes in government infrastructure consulting, investment banking, business valuations, and Alternative Investment Fund (AIF) services.

Strong Financial Performance

• The company achieved an impressive 92% annual revenue growth, with an operating revenue of ₹869.86 crore over the trailing 12 months (TTM).

• Boasts a pre-tax margin of 30% and a return on equity (ROE) of 22%, indicating high profitability and operational efficiency.

Market Position and Technical Strength

• The stock trades above its 50-day and 200-day moving averages, signaling strong upward momentum.

• An EPS rank of 94 and a relative strength (RS) rating of 87 underscore consistent earnings growth and market outperformance.

• Rising institutional interest reflects growing confidence in the company’s growth trajectory.

Strategic Growth Initiatives

• Diversification into new areas like stockbroking, wealth management, and investment advisory.

• Entry into solar energy projects and partnerships with state governments, demonstrating a commitment to sustainable and diversified expansion.

Robust Industry Dynamics

• Operates within the growing financial services sector, supported by strong promoter and institutional backing.

• Low promoter share pledging further boosts investor confidence.

Key Financial Metrics (FY22 vs. TTM):

• Net Sales (₹ Cr): 285 → 870

• Operating Profit (₹ Cr): 92 → 263

• Net Profit (₹ Cr): 54 → 158

• Return on Capital Employed (ROCE): 24.8%

• Debt-to-Equity Ratio: 0.56

• FII Holdings: 12.72%

Notable Investor: Madhusudhan Murlidhar Kela holds a 12.04% stake (as of September 2024) under the public category.

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Technical Analysis – As of December 7, 2024

• Moving Averages:

  • Stock trades above its 50-day and 200-day Simple Moving Averages (SMAs).

  • The "Golden Cross" formation (50-day SMA above 200-day SMA) signals bullish potential.

• Relative Strength Index (RSI):

  • RSI stands at 72.67 and positive Relative Strength at 0.12, suggesting buying interest is increasing.

• Price Performance:

  • Reached a new 1-week high of ₹559 (Dec 12, 2024), indicating upward momentum.

• Volume Analysis:

  • Growing trading volumes highlight rising investor interest, often a precursor to further price increases.

Additional Highlights

• Diversification into solar energy and insurance amplifies growth potential.

• Increased institutional investment indicates confidence in the company’s strategic direction.

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Conclusion
Choice International Limited demonstrates robust financials, market momentum, and strategic expansion efforts. While technical indicators present a generally positive outlook, investors should remain cautious about potential short-term corrections and broader market dynamics. Comprehensive due diligence is recommended before making investment decisions.

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Disclaimer: This document is for informational purposes only and does not constitute investment advice. Opinions expressed are personal and may be biased and contain inaccuracies.