business

Prudent’s stock has plummeted more than 40% from its peak price

Prudent is the second largest MF distributor after NJ India among the non-banks in terms of commission earned in FY24. If we consider the entire universe of MF distributors including banks, Prudent is the fourth largest. Being a mutual fund distributor, Prudent has benefitted from the robust growth seen in the MF industry. Prudent draws over 80% of its revenue through distribution of mutual funds. Prudent’s revenues and net profit have grown by CAGR (compounded annual growth rate) of 29% and 46% respectively over the past 5 years (FY19-24). The net profit growth has been on the back of rise in AUM (asset under management) to Rs 106,271 crore as at end December’24. Along with healthy inflows, the growth in AUM was led by marked to market (M2M) gains as markets witnessed a strong broad-based rally. Strong earnings visibility, asset light business model with recurring/annuity kind of revenue stream, high operating leverage and strong cash flows makes Prudent a unique proposition.

first published: Mar 21, 2025 07:49 am