Choice International Ltd -Multibagger Stock Analysis 2023
In this article, we can see Choice International Ltd as a Potential Multibagger Stock as on October 2023.
Choice International Ltd
It is an integrated and diversified financial services group. It provides a wide range of financial services that includes Broking and distribution, Investment Banking, Financial Services to Business Advisory, Regulatory compliance to Government authorities & other corporate entities, Retail loan distribution, Mutual Fund distribution, technical services, and other ancillary services. Mr. Kamal Poddar is the current managing director. Mr. Arun Poddar is the current Executive Director & CEO.
Rights Issue
During FY22, the Co. raised ~Rs. 51 Cr through allotment of 99.5 lakh Equity Shares at a price of Rs. 51 per share on a Rights Issue basis.
Bonus Issue
Co. issued a bonus issue in the ratio of 1:1 in FY23 increasing their authorized equity share capital to Rs. 108,00,00,000/- with an FV of Rs. 10 /- per share.
Decline in Promoters’ Shareholding
The promoter’s shareholding has decreased from ~64% in December 2021 to ~51% in September 2022.
Acquisition of Mutual Fund Distribution Business
During FY22, the Co.’s step-down subsidiary ‘M/s. Choice Wealth Private Limited acquired the mutual fund distribution business of Centcart Money Services Private Limited. [12] In October 2020, the company acquired the mutual fund distribution business of “Bank Bazaar”.
Retail and Institutional Services
The Co. offers B2C services which include Stock Broking, Wealth Services and NBFC Services. The B2B services comprise of Management consulting, Investment Banking and government services like Infrastructure Consulting and Government Advisory.
Website
Location
Co. has 104 offices, 150+ in-house tech xperts, 32K+ Choice Business Associates, 850K+ Clientele, 3.4K+ Team Strength across India. Choice International Ltd is headquartered in Mumbai.
Leaders
Mr. Kamal Poddar is the current managing director. A CA by profession and a fellow member of the Institute of Chartered Accountants of India (ICAI), CA Kamal Poddar is the Managing Director of Choice International Limited. He is a visionary who is currently working on the vision of creating Country’s first nation-level financial services hub. His vision has resulted into the rapid and multi-fold growth of Choice Group. He has been instrumental in converting a CA practice firm into full-fledged.
Mr. Arun Poddar is the current Executive Director & CEO.Mr. Arun Kumar Poddar is a Fellow Member of the Institute of Chartered Accountants of India and also acts as a partner at S K Patodia & Associates (Chartered Accountants). He holds expertise in Financial Services, Government Advisory and Management Consulting. Holder of strong ability to solve complex company problems using excellent judgment and decision-making skills, he is known in the industry for fostered change in company culture to be more open, transparent, and accountable. Mr. Poddar has worked closely with government, large corporates and retail customers throughout his journey. His vision of making financial services accessible to every citizen of India will drive the organization to be more customer centric and accessible in Tier 3-4 cities.
Mr. Suyash Patodia is the current Joint Managing Director. Mr. Suyash Sunil Patodia (DIN No: 09489670) is an Associate Member of the Institute of Chartered Accountants of India. He has completed his Three Years Articleship from M/s Delloite Haskins & Sells LLP which is among Top Four Chartered Accountant Firms in India. He is currently engaged in arranging tie-ups with Insurance Companies and is working on on-boarding new clients and intermediaries in one of our subsidiary M/s. Choice Insurance Braking India Private Limited. He has played an active role in developing ISMOS (Online Platform of Choice Insurance Braking) and scaling up Choice Connect (Back-end system) to bring Insurance Division in line with organisation goal of being a fintech. He is also keenly involved in various employee engagement initiatives to bring in a young culture in the Company, he is also being appointed as the Executive Director of our subsidiary Company M/s. Choice.
Mr. Ajay Kejriwal is the current Executive Director. CA Ajay Kejriwal is a fellow member of the Institute of Chartered Accountants of India. He also holds a degree of D.I.S.A. issued by I.C.A.I. He has experience of more than 15 years in financial markets. His experience in the field on IFRS convergence, international tax, foreign investment consultancy, and exchange control regulations are added advantage for the broking business. He possesses extensive experience in understanding the financials of companies and funds management within the division.
Mrs. Sudha Bhushan is the current Independent Director. Ms. Sudha Bhushan is a Chartered Accountant, Company Secretary, Insolvency Resolution Professional, Registered Valuer by Profession & also is an advisor to Bank of Baroda for its NRI and International operations. Ms. Bhushan is an expert in India FDI Policy, FEMA and have been working in these area for more than 15 years. Ms. Bhushan has also authored various books on FDI, Foreign Exchange Management Act, 1999 and International Taxation. A scholar throughout her life Ms. Bhushan has been awarded many awards and recognitions including “Women Empowerment through CA Profession” by Northern India Regional Council (NIRC) of CA Institute.
Highlights
- The Consolidated gross income of the Company for the financial year ended March 31, 2023 is
39,517.59 Lakhs as against28,595.59 Lakhs in the previous year. - Consolidated net profit during the year under review is
6,006.79 Lakhs as compared to5,360.45 Lakhs in the previous year. - The total gross income of the Company for the financial year ended March 31, 2023 on standalone is
1,298.72 Lakhs as against1,128.13 Lakhs in the previous year. The Company reported a net profit of228.90 Lakhs for the year ended March 31, 2023 as compared to the Net Profit of243.63 Lakhs in the previous year. The Company is a Holding Company, where all the services are offered through our subsidiaries. - During the Year under review the Authorised Capital of the Company was increased from Rs. 50,10,00,000/- ( Rupees Fifty Crores Ten Lakhs Only ) divided in to 5, 10,00,000 Equity Shares of Rs. 10 /- each to Rs. 108,00,00,000/- ( Rupees One Hundred & Eight Crores Only ) divided in to 10,80,00,000 Equity Shares of Rs. 10 /- each.
- During the Year FY 22-23, the Issued, Subscribed & Paid up Capital of the Company of the Company was increased pursuant to allotment of Equity Shares on Bonus issue in the ratio of 1: 1.
- During the year under review, the Company has not accepted any Public Deposits nor there are any outstanding Public Deposits during the Year ended March 31, 2023.
- prioritized serving MSMEs and classified our loan book as a priority sector lending (PSL) book. monthly disbursement rate peaked at Rs. 30 Crores. anticipate doubling our disbursement rate in the upcoming year, aiming for significant growth.
- implemented a robust loan management system, mobile application, and advanced data analytics to improve customer experiences and streamline processes. Compliance with data privacy and cybersecurity regulations is a top priority to safeguard customer information and prevent data breaches in the digital era.
Products & Services
- Equity Broking
- Wealth Management
- Insurance
- Loans
- Capital Advisory
- Management Consultancy
- Tax Advisory
- Government Advisory
Profit & Loss
Expansions
- on the approval of the Nomination and Remuneration Committee, the Board had approved the “Choice Employee Stock Option Plan 2022” for the employees of the Company& its Subsidiaries.
- In February 2022, the entire control of “M/s. Escorts Securities Limited (ESL)” was taken over by CEBPL. CEBPL contributes to 58% of the Co.’s total revenue.
- During FY22, the Co.’s step down subsidiary ‘M/s. Choice Wealth Private Limited’ acquired mutual fund distribution business of Centcart Money Services Private Limited.
- In October 2020, the company acquired the mutual fund distribution business of “Bank Bazaar”.
- Conversion of Preferential Warrants into Equity Shares In January 2020, the Co. had allotted ~1.9 Cr Equity Warrants at a price of Rs. 51 per warrant.
- During FY22, ~1 Cr Warrants were converted into equivalent number of equity shares in trenches. As on the year end there are no outstanding warrants to be converted into equity.
Positives
- Company is expected to give good quarter
- Company has delivered good profit growth of 37.5% CAGR over last 5 years
- Earnings grew by 113.4% over the past year
Negatives
- Stock is trading at 8.18 times its book value
- Though the company is reporting repeated profits, it is not paying out dividend
- Company has a low return on equity of 12.8% over last 3 years.
- The company might be capitalizing the interest cost
- Pledged holdings a problem
- Promoter holding has decreased over last 3 years: -17.2%
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Good |
| Valuation | Moderate |
| Debt | Moderate |
| Integrity | Moderate |
Summary
Based on above evaluation the company have low multibagger properties.
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