Prudent's stock dropped over 40% in India

Prudent's stock has fallen sharply, dropping over 40% from its highest price. This decline is significant for the company, which is the second largest mutual fund distributor in India, after NJ India, among non-bank firms. When including banks, Prudent ranks fourth overall. The company benefits from the growing mutual fund industry. More than 80% of its revenue comes from distributing mutual funds. Over the last five years, Prudent has seen its revenues grow at a rate of 29% per year, while its net profit has increased by 46%. The growth in net profit is partly due to a rise in assets under management (AUM), reaching Rs 106,271 crore by the end of December 2024. This growth was supported by strong inflows and gains from the stock market. Prudent's business model is considered strong, characterized by low overhead costs and consistent revenue streams. The company has good cash flow and operating leverage, which makes it a compelling option in the market.