IGI Logo

Revenue and PAT reported in-line growth

Nuvama Wealth’s (NUVAMA) 1QFY26 operating revenue grew 15% YoY to INR7.7b (in line). Wealth management/Asset Management/Capital Markets businesses grew 18%/23%/13% YoY.

* Nuvama Wealth revenue was up 17% YoY (in line) at INR2.2b, driven by 59% YoY growth in Managed Products and Investment Solutions (MIPS), while average clients assets grew 20% YoY to INR997b.

* Nuvama Private revenue grew 19% YoY (13% miss) to INR1.6b, driven by 25% YoY growth in annual recurring revenue. Average client assets rose 15% YoY to INR2t.

* Asset Management business revenue increased by 23% YoY (15% beat) to INR186m. Average fee-paying AUM jumped 85% YoY, while net new money declined 101% YoY.

* Capital Markets business revenue rose 13% YoY to INR3.7b (in line), led by 46% YoY growth in asset services to INR1.9b. Average assets grew by 26% YoY to INR1.2t.

* Total operating expenses increased by 13% YoY to INR4.2b (7% below est. mainly due to 17% drop in other expenses), driven by 13% YoY growth in employee expenses and 11% YoY growth in other opex. The cost-to-income ratio declined YoY to 54.7% in 1QFY26 from 56% in 1QFY25 and 56.4% in 4QFY25 (our est. of 56.2%).

* PAT grew 19% YoY to INR2.6b (in line). PAT margins came in at 34.3% in 1QFY26 vs. 33.1% in 1QFY25 and 33.1% in 4QFY25.

* In 1QFY26, the closing AUM for the wealth business grew 18% YoY to INR3.2t and for the asset management business, it grew 54% YoY to INR118b.

Valuation and view

We expect Nuvama to deliver a CAGR of 21%/19%/20% in AAUM/revenue/ PAT over FY25-27E, fueled by growing wealth management and capital markets businesses. We reiterate our BUY rating on Nuvama with a TP of INR9,600, based on 24x Mar’27E EPS.

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412