Prudent Corporate - Macro Tailwinds, Execution Could Support Better-Than-Expected Growth: ICICI Securities

ICICI Securities Report

Prudent Corporate Advisory Services Ltd. has progressed well in terms of assets under management growth aided by mark-to-market, traction in SIP and growth in mutual fund distributors. AUM/SIP book/MFD count clocked compound annual growth rates of 28%/23%/37% between FY19–FY23 and grew by 23%/15%/5% in 9M FY24.

This has led to elevation in distributor rankings (Prudent ranks third in total retail AUM and fifth in total folios, as per Computer Age Management Systems Ltd., as of December 2023).

As yield consolidates post removal of the B-30 incentive, we sense a possible upgrade in our earnings estimates driven by overall macro tailwinds and superior execution.

Possible upside risks emanate from continued traction in SIP (50.3% of client base is yet to have an SIP scheme) and spike in insurance cross-sales.

Higher mix of equity within AUM (93.7%) lends higher growth potential for Prudent compared to other asset management companies. Any MTM fall in AUM poses a downside risk. Upgrade to 'Add' from 'Hold'.

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