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    Nuvama Wealth

    NUVAMAGood
    Financial Services·5 Nov 2025
    Management Summary

    Nuvama delivered a resilient Q2 performance characterized by strong momentum in its core Wealth and Private segments, which helped offset a significant revenue hit from the loss of a large client in the Asset Services business. Management is focused on transitioning to a recurring revenue model, with ARR assets showing a 32% CAGR over the last 30 months. Despite short-term margin pressure in the lending book due to aggressive growth and regulatory provisioning, the company expects to return to a 20-25% growth trajectory by Q4 FY26 as the Asset Services business completes its rebasing.

    Highlights

    8

    • Revenue for the quarter stood at ₹772 crores, representing a 4% YoY growth.

    • Profit After Tax (PAT) was ₹254 crores, compared to ₹258 crores in the same quarter last year.

    • Return on Equity (ROE) remains healthy at approximately 28-29%.

    • Total Client Assets reached ₹4.4 lakh crores, driven by strong net new flows.

    • Wealth and Private business contribution to total revenue increased to 57%, up from 47% YoY.

    • ARR (Annual Recurring Revenue) assets in Nuvama Private crossed the ₹50,000 crore milestone, doubling in 2.5 years.

    • Lending book grew by 40% QoQ, though Net Interest Income (NII) was impacted by timing and provisioning.

    • Interim dividend of ₹70 per share declared, representing ~50% of H1 profit payout.

    Key financials

    Single quarter

    05 metrics
    1. 01Revenue₹772 Cr+4%YoY
    2. 02PAT₹254 Cr-1.5%YoY
    3. 03ROE28%
    4. 04Cost-to-Income Ratio56.6%
    5. 05Client Assets₹4.4 Cr

    Segment breakdown

    Nuvama Wealth
    67% Revenue Growth29.0% Asset Base Growth58% MPIS Revenue Contribution
    Nuvama Private
    ₹50,000 Cr ARR Assets32% ARR Asset CAGR (2.5 yrs)
    Asset Management
    ₹2,400 Cr CRE Fund Fundraise30% CRE Fund Deployment
    Asset Services
    5% Revenue Growth-15% Closing Assets Growth
    List

    Guidance & targets

    6
    CategoryTargetPriority
    Volume
    Net New Flows
    ₹25,000-26,000 crores
    		Medium
    Revenue
    Asset Services Revenue Recovery
    100%
    		High
    Revenue
    Recurring Assets Growth (Private)
    25-26%
    		High
    Other
    Commercial Real Estate Fund I Closure
    ₹4,000 crores
    		High
    Other
    Mutual Fund Business Go-Live
    Launch
    		Medium
    Headcount
    RM Addition (Private)
    15-16%
    		High

    Risks & concerns

    4
    RiskSeverity

    Client Concentration in Asset Services

    Top 10 clients contribute 60-70% of revenue, though management claims this group rotates every 12 months. — Both acknowledged

    medium

    Regulatory Changes (F&O and MF)

    New F&O regulations have brought down ADTO; SEBI consultation papers on MF could impact distribution income. — Management acknowledged

    medium

    Lending Book Margin Compression

    Margins declined from 6% to 4.4% due to timing of book growth and RBI-mandated ECL provisioning on end-of-period book. — Analyst acknowledged

    low

    Areas of Evasion(1)

    • Specific details on the 'large client' lost in Asset Services beyond the impact on yields.

    Q&A highlights

    3

    “If strategically, we are able to get a large number of smaller clients, the yields would be higher... at least for the next 2 to 3 quarters, we can project the yields... in the range of 2.6% to 3-3.2%.”

    Explains the impact of the lumpy client exit on yields and the strategy to replace them with more granular, higher-yielding clients.

    asked by Prayesh Jain, Motilal Oswal

    2 min read5 chapters

    Detailed Narrative

    01

    Wealth and Private Segments Drive Structural Shift

    Nuvama's strategy to pivot toward recurring revenue is yielding results, with the Wealth and Private segments now contributing 57% of total revenue, up from 47% a year ago. The Private segment's ARR assets crossed ₹50,000 crores, doubling in just 2.5 years at a 32% CAGR. Management expects this momentum to continue, targeting 25-26% growth in recurring assets for the full year, supported by a steady 15-16% annual increase in Relationship Manager (RM) headcount.

    02

    Asset Services Rebasing and Recovery Path

    The quarter was significantly impacted by the loss of a large client in the Asset Services business at the start of the period. However, management demonstrated resilience by recovering 50% of the lost revenue on a run-rate basis by the end of Q2. They have projected a full recovery by January-February 2026. Despite the client exit, the segment's revenue grew 5% YoY, and yields improved to 2.6%-3.2% as the mix shifted toward higher-margin clearing clients.

    03

    Lending Book Expansion and Margin Dynamics

    The lending book saw aggressive growth of 40% QoQ as the company seeks to close the 50% gap in lending income relative to its peers. While this growth didn't immediately reflect in Net Interest Income (NII) due to timing and ₹2 crores of quarterly fee waivers in the venture debt fund, management expects an uptick in NII in Q3 and Q4. Current margins of 4.4% were also suppressed by RBI-mandated Expected Credit Loss (ECL) provisioning on the expanded end-of-period book.

    04

    Asset Management Synergies and New Launches

    The Asset Management business is increasingly synergizing with the Wealth segment, particularly through the Commercial Real Estate (CRE) Fund, which has raised ₹2,400 crores toward a ₹4,000 crore target. Management plans to close this fund by February 2026 and launch a second CRE fund in Q2 FY27. Additionally, the company is preparing to go live with its Mutual Fund business in April 2026, which is expected to significantly expand its target market by lowering ticket sizes from ₹1 crore to ₹10 lakhs.

    05

    Capital Markets and Regulatory Navigation

    In the Capital Markets segment, Nuvama maintained its leadership as the #1 banker for IPOs. While institutional equities faced headwinds from new F&O regulations impacting market volumes, the Investment Banking (IB) pipeline remains robust at a probabilistic ₹150 crores. Management expressed a 'disciplined pragmatism' regarding regulatory changes from SEBI and RBI, viewing them as short-term strains that will ultimately have a multiplier effect on the industry's long-term health.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.