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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.
Assets under management / SIP book / MFD count clocked compound annual growth rates of 28% / 23% / 37% between FY19-FY23. There has been a QoQ increase of 30 basis points in equity AUM share.
Possible cost pressure from elevated marketing costs on margins and a possible lower yield (due to stoppage of B-30 incentive), in combination with the 38% rally in stock price since April 2023, has led us to downgrade the stock to 'Hold' (from 'Buy').
We however acknowledge possible upside risks from continued traction in SIP (50% of client base is yet to have a SIP scheme) and spike in insurance cross-sales.
Higher mix of equity within AUM (93.7%) lends higher growth potential for Prudent compared to AMCs.
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