PRUDENTNSESeptember 30, 2025

Prudent Corporate Advisory Services Limited

7,106words
54turns
7analyst exchanges
6executives
Management on call
Sanjay Shah
CHAIRMAN AND MANAGING
Shirish Patel
CHIEF EXECUTIVE OFFICER
Chirag Shah
NON EXECUTIVE DIRECTOR – PRUDENT CORPORATE ADVISORY SERVICES LIMITED
Chirag Kothari
CHIEF FINANCIAL OFFICER – PRUDENT CORPORATE ADVISORY SERVICES LIMITED
Parth Parekh
HEAD INVESTOR RELATIONS – PRUDENT CORPORATE ADVISORY SERVICES LIMITED
Lalit Deo
- EQUIRUS SECURITIES
Key numbers — 40 extracted
INR114,600 crore
26 with our current AUM. During the first half, we earned revenue on a daily average AUM of about INR114,600 crores, while our current AUM stands at about INR127,000 crores, when I'm talking to you. So that's a
INR127,000 crore
revenue on a daily average AUM of about INR114,600 crores, while our current AUM stands at about INR127,000 crores, when I'm talking to you. So that's an increase of about 11%, which gives us a strong momentum a
11%
nt AUM stands at about INR127,000 crores, when I'm talking to you. So that's an increase of about 11%, which gives us a strong momentum as we enter the second half of the current financial year. On
INR119,000 crore
ht-hand side, we have quarterly average AUM trends. The average AUM for the quarter, was close to INR119,000 crores. This number excludes the Indus AUM, which was integrated in last week of September. We will sta
17%
September. We will start earning on that from October onwards. Our quarterly average AUM grew by 17% year-on-year and 8% quarter-on-quarter, reflecting steady business momentum.
8%
tart earning on that from October onwards. Our quarterly average AUM grew by 17% year-on-year and 8% quarter-on-quarter, reflecting steady business momentum. Now turn to
13.2%
quarter-on-quarter basis. Starting with the year-on-year view on the left, our equity AUM grew by 13.2% during Q2 FY '26. It moved from about INR103,950 crores in September '24 to around 117,650 crores
INR103,950 crore
year-on-year view on the left, our equity AUM grew by 13.2% during Q2 FY '26. It moved from about INR103,950 crores in September '24 to around 117,650 crores in September '25. That's an increase of nearly INR13
117,650 crore
grew by 13.2% during Q2 FY '26. It moved from about INR103,950 crores in September '24 to around 117,650 crores in September '25. That's an increase of nearly INR13,700 crores. This growth was driven primar
INR13,700 crore
crores in September '24 to around 117,650 crores in September '25. That's an increase of nearly INR13,700 crores. This growth was driven primarily by strong net sales. Despite a negative mark-to-market impac
1.4%
nother encouraging aspect we would like to highlight is our mark-to-market impact was negative by 1.4% compared to a 6.2% decline in Nifty 500 in the last 12 months. This reflects benefit of rupee cos
6.2%
aspect we would like to highlight is our mark-to-market impact was negative by 1.4% compared to a 6.2% decline in Nifty 500 in the last 12 months. This reflects benefit of rupee cost averaging during
Guidance — 20 items
Sanjay Shah
opening
“We aim to reach around INR1,200 crores in monthly SIP flow by March 2026.”
Sanjay Shah
opening
“Final picture, the actual revenue impact and how arrangement will finally settle, we will be able to tell you only at the end of this quarter, which is after December is over.”
Sanjay Shah
opening
“Consequently, this base effect will now taper off in the second half, and we expect a healthy year-on-year growth trend to resume on this line item.”
Sanjay Shah
opening
“Now for the current fiscal, we expect a similar total provision with INR3 crores booked in Q1 and INR5.2 crore booked in Q2.”
Sanjay Shah
opening
“That said, we expect lower commission provisioning in second half compared to last year as provisioning is now more evenly phased throughout the year.”
Sanjay Shah
opening
“Under new structure, my rate will be 85 basis points, excluding of GST.”
Sanjay Shah
opening
“And since it affects everyone, and whenever we always say that whenever the impact is transferred to the distributors, I'm sure it will be transferred to everybody.”
Sanjay Shah
opening
“On the day of announcement, option value per share was approximately 542 as per CA certificate, which will be amortized over a period of next 12 months, equal each quarter.”
Sanjay Shah
opening
“So we expect a P&L hit of about INR7.10 crores, which will be booked under the share-based payment expenditure under employee benefit expenses.”
Shirish Patel
qa
“Maybe that will be the pent-up demand because many of the investor, many of the policyholder, many of the distributors would not have participated in the health insurance in the month of September, waiting for the GST cut.”
Risks & concerns — 15 flagged
Another encouraging aspect we would like to highlight is our mark-to-market impact was negative by 1.4% compared to a 6.2% decline in Nifty 500 in the last 12 months.
— Sanjay Shah
This reflects benefit of rupee cost averaging during the volatile but range-bound market as well as an important role played by our distributor partners in fund selections and asset allocations.
— Sanjay Shah
Marginal difference between AUM and revenue growth on a half yearly basis is primarily due to impact of back book repricing, which has started happening from August of last year onwards.
— Sanjay Shah
So now let me touch upon the impact of GST in the insurance segment.
— Sanjay Shah
However, on a year-on-year basis, decline was primarily due to the absence of liquiloan in the current fiscal.
— Sanjay Shah
Mark-to-market losses on equity portfolio and lower yields on bank term deposits during the quarter led to partial reversal of earlier gains, creating a temporary drag on the overall treasury income.
— Sanjay Shah
So this could mean an overall impact of 2 to 2.5 basis points assuming onetime portfolio turnover ratio for the entire industry.
— Sanjay Shah
And would that mean some pressure on your profitability going ahead?
— Prayesh Jain
Of course, I think that might create pressure on a few smaller distributors getting attracted with the higher commission.
— Shirish Patel
Sir, second question is on the insurance side, rightly you mentioned that the health insurance business is impacted more, but the communication from health insurance companies has been that the growth in the business particularly in the month of October, whatever growth we have seen, will it be more than enough to offset the impact of the commissions for the distributor?
— Prayesh Jain
So we don't see any challenge there in terms of margins.
— Shirish Patel
And in terms of the potential impact of the SEBI paper, again same question, how much will you able to pass on in the same sharing ratio?
— Swarnabha Mukherjee
Third point you said is the impact of insurance in insurance in GST due to the surrender charges guidelines, which impacted the revenue last year.
— Shirish Patel
The impact of revenue on the health insurance side definitely would be higher.
— Shirish Patel
So sir, just wanted to understand the incremental addition of MFDs doing insurance is becoming difficult?
— Sanketh Godha
Q&A — 7 exchanges
Q
Sir, firstly, a broader question rightly towards the end of your opening comments, you mentioned about distributor addition and you had almost about 1,000 distributors in this quarter. Now how is the landscape changing on the ground for adding distributors because what we are hearing is there is a high competitive intensity to acquire distributors from many players. And therein, they are sharing a much higher number in the first year from a commission perspective. We are hearing numbers as high as 80%, 90% in the first year as well. So is that the landscape changing materially? And how do you
Sanjay Shah
Shirish? So definitely, I think as we discussed earlier, I think there are a few more platforms entered in the industry, and there could be the competition to the distributor empanelment. But on a positive side, I would say that more and more people are working to get more distributors to the mutual fund industry. That is a positive thing. But on existing mutual fund distributor, competition will increase that we also we have to accept. Two things I would say here. One, more and more people communicate the advantage of platform. Earlier, only 2 major players on a platform side were communicati
Q
So the first point is October month net sales is higher than what we did in the month of August and September in spite of having the festive seasons. We could see that the momentum of mutual fund continues, the participation in equity funds continues and the gross flows and the SIP flows continued. So October month in terms of net sales is far better. Coming to the GST impact to the insurance side, first on the insurance side. So mainly, we will be able to pass it on in proportion to our distributor. So whatever would be the impact on -- because of the GST, whatever will be passed on to us by
Swarnabha Mukherjee
Right, sir. And in terms of the potential impact of the SEBI paper, again same question, how much will you able to pass on in the same sharing ratio? So in mutual fund, assuming that the final impact comes the way the consultation paper is talking about, we rather believe that we would be the beneficiary because today, our almost 1/3 of our AUM is contributed or rather I would say that the brokerage pay-out is contributed by those who are non-GST. so probably, I think today, they have got this tax arbitrage because of this, but they are not paying GST on that. So we are very, very confident th
Q
Just a few questions from my side. First, in terms of going back to the previous participant question in terms of the mutual fund business. Obviously, you announced the circular which has come out, there was a previous portion of the circular somewhere around May 2023. And I would assume that at that point of time, you might have had some discussions with the manufacturers or the asset managers in terms of how the distribution of this burden will happen between various stakeholders in the ecosystem. So based on these prior discussions and maybe incremental discussions that you might have had i
Shirish Patel
To give the answer of your first question, comparing 2019 and comparing now, the 2019 AMCs have passed on majority of the hit. Currently, after the consultation paper, what kind of hit they will be able to pass it on. I think no AMC will currently communicate officially. But my guess is that whatever would be the impact this time to the AMC majority of the hit, AMC will pass it on to distributor. That is what my reading after discussion with them. The reason being last 2 years, many of the AMCs have done the TER cut on the book when there were no regulatory changes in spite of that, I think AM
Q
Sir, my first question is on Indus, the 2,000 source of AUM. You could just add that how much yield you can we will get. And the INR124 crores cash PayOut of how long it will be amortized over the period? So that's my first question.
Shirish Patel
So Sanketh, I think, INR2,000 crores is over 2% of our overall AUM. And more or less, my belief is that -- because if you look at whenever the merger happens, this merger formula says that you will get the rate whichever is lower between the two. So the -- it cannot be yield accretive in any case. Let us say, for example, on a particular transaction, Indus is getting 1% and Prudent is getting 90 basis points, I'll get 90 basis points. Or, for example, in particular transaction, I would have got 1.10, but they are getting 1%, I'll get 1%. So because of the merger rule, it has to be lower of my
Q
I just have 1 clarification on the insurance bit of it. So when you say that 70% in health and 30% in life is where you have seen the GST impact come in. So is this where your commissions have been negotiated down by 15%, so that whatever GST used to pay has been passed on to you?
Shirish Patel
Practically earlier, whatever my commission used to be, let us say, my commissions were 20%, we used to pay the GST. So 20% plus 18% of 20%. That is how the insurance company used to pay. When we say that 70% business got impacted in terms of health insurance, the 20% commission, the f 20% commission has continued, but now communication is that 20% includes the GST component. So the commissions, for example, 20 plus GST, now it is 20% minus GST.
Q
Just two questions. So firstly, on this new product with a new category, which is SIF, so we have seen 2 launches in the last 2 months. So just wanted to understand like what kind of an -- did we participate in those 2 products and whether we raised any amount? And what would be the yield and the sharing ratio as we have done this?
Sanjay Shah
So we are very, very bullish on this new category. Unfortunately, the number of certified MFDs in the country are yet very, very low. And hence, in our system also out of our 34,000, 35,000 ARN holders. Those who are certified to sell SIP are less. Hence, the participation of partners in SIF business is very, very less. While we are talking more than 200-plus partners are certified that the Industry numbers are around 3,000 plus somewhere. The industry around 3,000-plus ARM orders are certified for SIF. The same number for us is around 200 plus. We participated in SIF, but obviously, we did no
Q
Thank you. Thank you, everyone, for attending this call. And if there is any question, which has not been addressed if you have any query, I think the management, including parts who handles our IR is all the time available to you guys. Yes. Thank you.
Management
Speaking time
Shirish Patel
18
Moderator
9
Sanketh Godha
8
Prayesh Jain
6
Sanjay Shah
5
Lalit Deo
4
Dipanjan Ghosh
2
Swarnabha Mukherjee
1
Pranuj Shah
1
Opening remarks
Lalit Deo
Yes. Thank you. Good morning, everyone, and thanks for joining the call. To give a brief update on the 2Q FY '26 results and address investor questions, we have with us from the management of Prudent Corporate Advisory Services Limited; Mr. Sanjay Shah, Chairman and Managing Director; Mr. Shirish Patel, CEO and Whole-Time Director; Mr. Chirag Shah, Non-Executive Director; Mr. Chirag Kothari, CFO; and Mr. Parth Parekh, Head, Investor Relations. We would request management to start with the opening comments, post which we can open the floor for Q&A. Thank you, and over to you, sir.
Sanjay Shah
Thank you, dear. Thank you. Good morning, everyone. I extend a warm welcome to all of you joining us on Prudent's second quarter earnings call. Thank you for taking the time to be with us. I hope you would have the investor presentation ready with you, which has been uploaded on the exchange yesterday. So please and I'll start talking about and we will give you the commentary. I'll refer to the various slides. So let us begin with the Slide 45. So this slide shows how our AUM has moved during the last quarter. So if you look at on this slide on the left-hand side, it's a comparison of daily average AUM for first half of FY '26 with our current AUM. During the first half, we earned revenue on a daily average AUM of about INR114,600 crores, while our current AUM stands at about INR127,000 crores, when I'm talking to you. So that's an increase of about 11%, which gives us a strong momentum as we enter the second half of the current financial year. On the right-hand side, we have quarterly
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