Conference Call with Prudent Corporate Advisory Services Management and Analysts on Q3FY24 Performance and Outlook. Listen to the full earnings transcript.
Financial Services company Prudent Corporate Advisory Services announced Q3FY24 results: Q3FY24 Total Revenue reached 209.9 crore, reflecting a significant YoY growth of 33% from 158.3 crore in Q3FY23. Operating Profit for Q3FY24 stood at 50.0 crore, showing an 18% YoY growth from 42.5 crore in Q3FY23. Profit After Tax (PAT) for Q3FY24 was 35.7 crore, indicating a robust YoY growth of 25% from 28.5 crore in Q3FY23. EPS in Q3FY24 was 8.62, showing a substantial YoY growth of 25% from 6.89 in Q3FY23. Closing AUM as of 31 December 2023 stood at Rs 77,774 crore. Systematic Investment Plan (SIP) book grew by 32% YoY in the month of December & stood at Rs 649 crore. Our market share of SIP flow in the industry stood at 3.7% Commenting on the results, Sanjay Shah, Managing Director of Prudent Group stated, “Mutual funds as an investment asset class is gaining popularity. This is not only visible in the rising number of unique mutual fund investors but also in the rising number of Systematic Investment Plan (SIP) number. In a span of a year, unique mutual fund investors have risen by 53 lakhs to 4.2 crore. The monthly SIP book has increased by Rs 40 billion in a year to Rs 176 billion in December. In this growing industry, distributors will play a vital role in guiding people to invest in mutual funds. Their role extends beyond mere investment facilitation; they aid clients in understanding their financial goals and risks, and in balancing asset and product allocation coupled with providing behavioural coaching. In this phase of Amrit Kaal wherein per capita income is set to grow 10x in the next twenty-five years, Prudent will have a huge growth leeway. By March 2026, as we aim to achieve an AUM of Rs 1 trillion, we foresee our monthly SIP inflow crossing the mark of Rs 1000 crore. With a robust performance track record and a promising economic backdrop, we are poised to continue our successful growth trajectory” Result PDF
Financial Services company Prudent Corporate Advisory Services announced Q2FY24 & H1FY24 results: Q2FY24: Quarterly Average AUM increased by 29%, reaching Rs 66,584 crore compared to Rs 51,630 crore in Q2FY23. Total Revenue rose by 29%, reaching Rs 190.0 crore in Q2FY24, up from Rs 147.6 crore in Q2FY23. Profit Before Tax reached Rs 40.6 crore in Q2FY24, marking a 10% increase from the Rs 37.0 crore reported in Q2FY23. Profit After Tax also exhibited a 10% increase, reaching Rs 30.4 crore in Q2FY24 compared to Rs 27.6 crore in Q2FY23. Earnings Per Share stood at Rs 7.35 in Q2FY24, showing a 10% growth from Rs 6.67 in Q2FY23. H1FY24: Revenue from operations grew 29% YoY to Rs 355.5 crore led by 27% growth in quarterly average assets under management (AUM) in the mutual fund vertical. Growth in AUM was led by marked to market (M2M) gains as markets witnessed a strong broad-based rally from April 2023 onwards. Our closing AUM as of 30 September stood at Rs 69,127 crore. Profit after tax grew by 25% YoY to Rs 58.5 crore led by a strong operational growth & higher other income. There was an on-off income about the reversal of impairment of Rs 2 crore in H1FY23. If we exclude this one-off, profits in H1FY24 have grown by 30%. We ended September 2023 with a monthly SIP flow of Rs 595 crore. Our market share of SIP flow in the industry stood at 3.7%. Commenting on the results, Sanjay Shah, Managing Director of Prudent Group stated, “We are uniquely placed in the wealth management space as we focus on the retail segment of India which is largely underserved. There are just 4 crore unique mutual fund investors in the country & this number is set to grow by leaps & bounds in this phase of Amrit Kaal wherein per capita income is set to grow 10x in the next twenty-five years. Over the years, it is well established that mutual funds as an asset class have delivered inflation-beating returns & this product will eat into the share of bank deposits slowly but surely. By March 2026, as we aim to achieve an AUM of Rs 1 trillion, we foresee our monthly SIP inflow crossing the mark of Rs 1000 crore. With a robust performance track record and a promising economic backdrop, we are poised to continue our successful growth trajectory” Result PDF
Other Financial Services Company Prudent Corporate Advisory Services announced Q1FY24 results: Revenue from operations grew 29% YoY to Rs 165.4 crore, led by 22% growth in quarterly average assets under management (AUM) in the mutual fund vertical coupled with a doubling of insurance revenues. Growth in AUM was led by marked-to-market (M2M) gains as markets witnessed a strong broad-based rally in Q1FY24. We ended June 2023 with a monthly SIP flow of Rs 542 crore, with almost a second rupee of gross inflow coming from SIP. As of 30 June 2023, our closing AUM stood at Rs 63,057 crore. Profit after tax grew by 45% YoY to Rs 28.1 crore led by strong revenue growth & higher other income. Commenting on the results, Sanjay Shah, Managing Director of Prudent Group stated “Our story at Prudent is one of consistent growth and SIPs have been the unwavering compass guiding us through this journey. As we harness the power of SIPs, we are not just keeping pace with the industry but setting the pace as our market share in SIPs is almost 2.6x our market share in total AUM. We are witnessing a compelling trend in our incoming SIPs: the average value of new SIPs outpaces the existing book average by a significant 17-18%. As we move forward, we are cognizant of a significant insight: even within our clientele, 50% have not yet embraced SIPs. This untapped segment holds substantial promise for expansion. In the next three years, as we aim to achieve an AUM of Rs 1 trillion, we foresee our monthly SIP inflow crossing the mark of Rs 1000 crore. With a robust performance track record and a promising economic backdrop, we are poised to continue our successful growth trajectory” The CEO & Whole-time Director, Shirish Patel, added, “Our Mutual Fund Distributors (MFDs) are our key partners and pillar of strength for achieving these robust results. As higher vintage MFDs increases in our system, we see a huge tailwind to business growth. FY23 marked a significant shift with 2,058 MFDs moving from the 2-5 year maturity bucket to the >=5 years category, further solidifying the experienced cohort. Further, our constant endeavor to add products to our platform is leading to advisors being able to fulfill all our client's requirements thus becoming a ‘Multi Product Distributor’ rather than just a ‘Mutual Fund Distribution’. Revenues from products other than mutual fund distribution have grown at 41% CAGR FY20-23, with insurance leading the pack. Around 8850 partners or their family members, have become insurance selling Point of Sales Persons (POSPs), helping us improve our cross-selling capacity.” Result PDF
Financial Services company Prudent Corporate Advisory Services announced FY23 results: Revenue from operations grew 36% YoY to Rs 611.3 crore, led by 33% growth in yearly average assets under management (AUM) in the mutual fund vertical coupled with insurance revenues almost doubling. Growth in AUM was led by robust Systematic Investment Plan (SIP) flows & acquisition of Karvy’s mutual fund folios. We ended March 2023 with a monthly SIP flow of Rs 517 crore, with almost a second rupee of gross inflow coming from SIP. As of 31 March 2023, our closing AUM surpassed the Rs 56,000 crore mark. Operating profits grew 51% YoY to Rs 173.3 crore, led by the benefits of operating leverage coupled with a larger share of insurance in overall revenue composition. Profit after tax grew by 45% YoY to Rs 116.7 crore Cash flow from operations (CFO) during the year stood at Rs 127 crore & CFO/Net Income stood at 109% indicating a healthy cash conversion. "Our FY23 results reflect the determined efforts of the entire Prudent team," said Sanjay Shah, Managing Director. “We achieved three key milestones during FY23. Firstly, our Mutual fund vertical crossed Rs 500 crore in revenues. Secondly, our cash flow from operations exceeded Rs 100 crore. And finally, our insurance vertical crossed 10% of the overall revenues. Historically, 52% of our AUM growth has been contributed by net sales & the balance 48% from Marked to Market (M2M) gains. Barring the covid hit years, our net sales number has been equal to or higher than our gross flow from SIPs. Annualizing the monthly SIP flow as of March-23 of Rs 517 crore, we expect gross flows from SIPs to exceed Rs 6,200 crore in FY24, which is 11% of the FY23 closing AUM. So, we are confident of generating 11% growth from net sales and expect the balance 10% to accrue from Marked to Market (M2M), enabling us to grow at an annualized rate of 20% over the longer run. This will help us reach the Rs 1 trillion AUM mark in the next three-four years. Additionally, a perusal of inorganic opportunities led by an investment book of Rs 142 crore coupled with healthy cash generation each year may help us reach this mark a bit earlier”, he added. CEO & Whole-time Director, Shirish Patel, added, “Our Mutual Fund Distributors (MFDs) are our key partners and pillar of strength for achieving these milestones. Each year, more MFDs are migrating to higher buckets of AUM. As of March 2023, we have 1,040 MFDs handling an AUM above Rs 10 crore, which was just 340 four years back. Today, the need of the hour is the availability of multi-products to fulfil the demand of clients & technology platforms to execute & service clients in a paperless manner. This, coupled with the rising compliance hassles, is leading to MFDs shifting to technology platforms. This trend is benefiting us immensely. Also, our wide range of product offerings is helping MFDs to meet all the requirements of their clients under a single platform. Revenues from products other than mutual fund distribution have grown at 41% CAGR FY20-23, with insurance leading the pack. Around 7,750 partners, or their family members, have become insurance selling Point of Sales Persons (POSPs), helping us improve our cross-selling capacity.” Result PDF