Prudent Corp Q2 Review- MTM Increase In AUM, Insurance Cross Sales Lead To Earnings Upgrades: ICICI Securities

ICICI Securities Report

Prudent Corporate Advisory Services Ltd. has progressed well in terms of AUM growth aided by mark-to-market, traction in SIP and growth in MFDs. AUM/SIP book/MFD count clocked CAGRs of 31%/28%/21% between FY19–24 and grew by 11.6%/12.1%/4% on a QoQ basis in Q2 FY25.

Despite consolidation of yields, post removal of the B-30 incentive, upgrade in earnings estimates is driven by higher-than-expected AUM growth and superior execution (Insurance revenue has also grown 45% in H1 FY25).

Possible upside risks emanate from continued traction in SIP (45% of client base is yet to have a SIP scheme) and spike in insurance cross-sales.

Higher mix of equity within AUM (96.7%) lends higher growth potential for Prudent compared to AMCs. Any MTM fall in AUM, increase in regular mix and cuts in commissions (both AMC and insurance) are additional risks. Downgrade to 'Reduce'.

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