Nuvama Wealth Management: PAT up 76% & Revenue up 45% in 9M-25 at a PE of 22
Outperforming on 5 year targets. Outlook for strong growth. Bottom-line expected to growth faster than top-line. Overall growth to be slightly better than industry growth
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1. Why is NUVAMA interesting?
nuvama.com | NSE: NUVAMA
Wealth management in India is still developing, offering significant opportunities. By 2028, India is expected to become the 4th largest private wealth market in the world. NUVAMA, a leading wealth management firm, has a strong record of growth and is well-positioned to take advantage of this opportunity.
2. Leading wealth manager in Affluent & HNI segments
Amongst top 2 independent private wealth players
Business Segments
Wealth management - Distribution of financial products, Investment advisory, Lending against securities and Securities broking for clients
Asset management - Investment management for Alternative Investment Funds (AIFs) & Portfolio management services (PMS)
Capital markets - Institutional broking business, Merchant banking business and Advisory
3. FY21-24: Operating PAT CAGR of 44% & Revenue CAGR of 27%
Operating PAT
Reported Financial Statements
4. Strong FY-24: PAT up 105% & Revenue up 42% YoY
Strong margin expansion
5. Strong Q3-25: PAT up 43% & Revenue up 30% YoY
6. Strong 9M-25: PAT up 76% & Revenue up 45% YoY
7. Business metrics: Strong & improving return ratios
8. Outlook: Strong business Outperforming on targets
i. Outperforming on 5 years targets
Wealth Management
Target : In 5 years grow clients and client assets to 2-2.5x or 20% CAGR
Dec’24: Achieved CAGR of 33% YoY
Asset Management
Target: In 5 years grow AUM to 6-8x or 52% CAGR
Dec’24 : Achieved CAGR of 62% YoY
Asset Services
Target: In 5 years grow clients assets to 2-2.5x or 20% CAGR
Dec’24: Achieved CAGR of 73% YoY
ii. Outlook for strong business growth
Wealth and Asset Management to be key drivers and would constitute 75 - 80% of the earnings
Wealth Management : In 5 years grow clients and client assets to 2-2.5x
Asset Management: In 5 years grow AUM to 6-8x
Asset Services: In 5 years grow clients assets to 2-2.5x
ii. PAT to grow faster than top-line growth
Operating leverage to deliver significant improvement in cost to income ratio
9. PAT growth of 76% & Revenue growth of 45% in 9M-25 at a PE of 22
10. Hold?
If I hold the stock then one may continue holding on to NUVAMA
9M-25 execution gives indications that NUVAMA is on track to deliver a strong FY25 in line with the momentum delivered in FY24
NUVAMA has executed stronger results than the targets it set out for itself
NUVAMA is in the middle of a strong run and has delivered strong growth in top-line & bottom line for the last 7 quarters starting Q1-24
NUVAMA is riding on the industry tailwinds and investors can also hold on and ride NUVAMA till the tailwinds last and the business momentum continues.
The wealth management sector is experiencing robust growth driven by factors like rising GDP, increased financialization of savings, and a shift from unorganized to organized players.
Nuvama is well-positioned to capitalize on these trends, with its diversified business model, strong brand presence, and aggressive expansion strategy.
The sector is expected to grow 6-8x in the next decade
11. Buy?
If I am looking to enter NUVAMA then
NUVAMA has delivered PAT growth of 76% and revenue growth of 45% in 9M-25 at a PE of 22 which makes the valuations quite acceptable in the short term.
NUVAMA has given an outlook for strong business growth with PAT growing faster than the top-line. A PE of 22 can be sustained by NUVAMA over the longer term even if it sustains the performance delivered since FY21
A PE of 22 is not a very challenging to sustain valuations at given the runway for growth
NUVAMA is guiding to to grow slightly better than the industry which implies an increasing market share
We will be in line with the industry growth is what we can say or slightly better than that. And if there is a marginal or there is a significant improvement in the industry uptrend, we will follow that.
Previous coverage of NUVAMA
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