Choice profit rises 26.76% as lower tax offsets margin pressure
Consolidated revenue grew +21.23% YoY, but expenses grew faster and the stock fell -6.43% in five sessions.
Filed 23 Apr 2026, 22:52 IST · after market close · Choice International Ltd (CHOICEIN)
Key takeaways
- Consolidated net profit rose +26.76% YoY to Rs 67.84 cr, helped by a 5.88 percentage-point decline in the tax rate.
- Revenue grew +21.23% YoY, but expenses grew +21.98%, narrowing operating margin by 0.38 percentage points.
- The stock fell -6.43% five sessions after the results, versus a 0.52% median absolute move after the last eight quarterly results.
Price around the results
Lower tax rate lifted net profit growth
Consolidated net profit grew +26.76% YoY, ahead of the +17.23% increase in profit before tax. The tax rate fell by 5.88 percentage points to 21.75%, which gave net profit a larger lift than operating performance alone. Other income rose +250.00% YoY but accounted for 8.24% of pre-tax profit, making it a supporting rather than dominant contributor.
Costs outpaced revenue on-year but eased sequentially
Expenses grew +21.98% YoY against revenue growth of +21.23%, narrowing operating margin by 0.38 percentage points. Sequentially, revenue rose +1.10% while expenses declined -0.20%, lifting margin by 0.82 percentage points. Interest increased +19.97% YoY and +20.53% QoQ, while depreciation increased +263.18% YoY.
Margin recovered for two quarters but trails sector peers
Operating margin improved from 32.55% in Q2FY26 to 36.84% in Q3FY26 and 37.66% in Q4FY26, marking two consecutive quarterly increases. Even after that recovery, Choice's margin was 21.75 percentage points below the 59.41% median for 52 Financial Services peers that had reported. The company ranked 15th from the bottom on this measure.
Management links expansion to wider distribution
Management said it plans to establish a presence in every district over the next three years, supported by new branches and franchisee network expansion. The presentation said data-led lead generation has expanded client outreach, while Choice Business Associates are supported by proprietary technology, training and digital service execution. Management also projected Mutual Fund QAAUM growth of 16% to 18% CAGR from Fiscal 2026 to Fiscal 2030.
Five-session decline was unusually weak for the stock
After the results, the stock fell -2.26% on day 0 and -6.43% by day 5, with the decline reaching -8.99% by day 30. That was weaker than its recent pattern: five of the last eight post-results reactions were negative, but the median absolute move was only 0.52%.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹307 cr | ₹303 cr | +1.10% | +21.23% |
| Other income | ₹7 cr | ₹5 cr | +36.26% | +250.00% |
| Expenses | ₹191 cr | ₹192 cr | -0.20% | +21.98% |
| Operating profit | ₹116 cr | ₹112 cr | +3.34% | +20.00% |
| Operating margin (%) | 37.66% | 36.84% | — | — |
| Interest | ₹26 cr | ₹21 cr | +20.53% | +19.97% |
| Depreciation | ₹10 cr | ₹3 cr | +221.41% | +263.18% |
| Profit before tax | ₹87 cr | ₹92 cr | -6.18% | +17.23% |
| Tax | ₹19 cr | ₹27 cr | -29.61% | -7.73% |
| Net profit | ₹68 cr | ₹66 cr | +3.38% | +26.76% |
| EPS (₹) | ₹3.05 | ₹3.09 | -1.29% | +13.81% |
Operating margin of 37.66% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -2.26% | -1.12% |
| Next session | -3.43% | — |
| 5 sessions | -6.43% | -6.20% |
| 15 sessions | -8.56% | — |
| 30 sessions | -8.99% | — |
Volume on the results session was 1.58× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- Choice plans to establish a presence in every district over the next three years.
- Mutual Fund QAAUM is projected to grow at 16% to 18% CAGR from Fiscal 2026 to Fiscal 2030.
Expansion
- Choice is expanding its footprint through new branches and franchisee network expansion.
- Choice is helping set up an ethanol plant under a cooperative model in Chhattisgarh.
New initiatives
- Choice enriched client outreach through data-led lead generation.
- Choice Business Associates are supported by a proprietary engine, training and digital service execution.
What to watch
- Whether operating margin holds above 37.66% after two consecutive quarterly increases.
- Whether interest growth moderates from +20.53% QoQ.
- Progress toward management's stated goal of a presence in every district over the next three years.