Prudent Corporate Advisory Services Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Prudent Corporate Advisory Services Limited (PRUDENT) Q4 FY22 Earnings Concall

Q&A Highlights:

• Shivani Singh of Wisdom Capital asked about the commission structure for NBFs. Shirish Patel CEO said the commission structures are not based on the vintage with the company it is based on the AUM with the company. As the AUM increases the share of commission also increases.

• Shivani Singh of Wisdom Capital also asked about the roadmap going ahead with cash utilization. Sanjay Shah MD said PRUDENT will like to keep cash for some kind of acquisition. PURDENT added that it will wait for couple of years to explore some quality opportunity.

• Lalit Deo of Equirus Securities asked about the impact on PRUDENT due to some issues with front running in the MF industry. Sanjay Shah MD replied that PRUDENT has not seen any impact due to the news of front running.

• Lalit Deo of Equirus Securities enquired about the SIP inflows in last couple of months due to volatility in the markets. Shirish Patel CEO replied the company’s SIP inflows are positive and the net book side is also growing. As of now there is no impact on the inflows due to volatility.

• Rohan Mandora of Equirus asked about the split of trade payables and receivables across businesses as of March. Chirag Kothari CFO replied that the total trade receivables was INR93.75 crore out of that INR43.36 crore pertains to mutual fund business. So outstanding from AMCs is at INR43.19 crore and balance amount is receivables from clients.

• Neha Sharma of Pearl Global asked about the steady state number of EBITDA margin as the margins have expanded. Sanjay Shah MD replied that overall the company believes that the operating leverage will continue to play out in its favor and hence EBITDA margin will continue to improve. At least in near term the visibility is clear.

• Neha Sharma of Pearl Global also asked if the margin levels are sustainable or if there is any scope of expansion. Sanjay Shah MD replied that near term the margin is sustainable.

• Ansuman Deb with ICICI Securities asked about employee cost increase and the outlook. Shirish Patel CEO said the company’s major employee cost comes by way of sales team. Last FY PRUDENT added almost 50% of the sales team member. The incremental manpower required for servicing is very negligible. In FY22, PRUDENT will add manpower only if it adds new branches or there’s any potential in any market.