Prudent Corporate Advisory Services Q1 FY27 earnings call

Prudent Corporate Advisory Services reported a healthy AUM growth trajectory in Q1 FY27. The average AUM for the quarter stood at INR 1.33 lakh crores, reflecting a sequential growth of 4% and a robust year-on-year growth of 21%. The current AUM reached approximately INR 1.4 lakh crores, representing a 15.7% increase from the FY26 average AUM of INR 1.21 lakh crores, which is expected to provide a strong revenue tailwind for the remainder of FY27.

Equity AUM demonstrated strong performance, growing by 18% year-on-year to INR 1.34 lakh crores in June 2026. This growth was significantly driven by new money and consistent SIP flows. Despite a weak market environment where NIFTY 50 declined by 6.5% and NIFTY 500 by 2.6%, the company's equity AUM generated a positive mark-to-market gain of 2.9%. Net sales for Q1 FY27 remained resilient at INR 3,790 crores, marking a healthy 50% year-on-year growth.

Mutual fund revenue grew by 17.9% year-on-year, but this was at a slower pace than AUM growth due to regulatory changes implemented from April 2026. These changes, which included adjustments to GST treatment and the removal of 5 basis points of exit load, impacted the gross yield by approximately 2.8 basis points. As a result, the gross yield for Q1 FY27 settled at around 88 basis points, which management believes is now a stable and sustainable level.

The company's revenue growth was supported by strong performance across diversified product offerings. Insurance revenue grew by 20.6% year-on-year, with life insurance fresh premiums surging 73.4% (participating plans up 100% and ULIP up 82%) and general insurance premiums increasing 36.8%. Other financial and non-financial product revenue, including PMS and bond distribution, also saw significant growth of 28.4% year-on-year, with PMS AUM growing 37% to INR 1,900 crores.

Operating profit for Q1 FY27 grew substantially by 32.4% year-on-year to INR 89.1 crores, leading to a 44.4% increase in profit after tax to INR 74.8 crores. Commission and fee expenses grew at a slower pace of 9.8% due to the aforementioned regulatory changes. Employee costs, however, increased 19% sequentially, influenced by an annual wage revision and continued investment in expanding the branch network, with plans to add around 30 new branches during FY27.

Management highlighted that recent regulatory changes are creating incremental opportunities for distributor growth and industry consolidation. Non-GST registered distributors are increasingly seeking partnerships with platforms like Prudent for technology, compliance, and operational support. The company capitalized on this by adding approximately 600 partners per month in Q1 FY27, an increase from 430 in FY26, with the majority being existing distributors joining their platform.

The company expressed a very positive outlook on the new regulatory framework for mutual fund-only PMS with an INR 25 lakh ticket size. Management views this as a significant opportunity to provide services to retail clients and is actively evaluating options for entering this segment, including potential acquisitions of PMS entities or obtaining its own license, once the consultation paper is finalized.