Nuvama Wealth Management Limited — Q2 FY26 earnings call

Call held 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

  • 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

  1. Revenue ₹772 Cr +4%YoY
  2. PAT ₹254 Cr -1.5%YoY
  3. ROE 28%
  4. Cost-to-Income Ratio 56.6%
  5. Client Assets ₹4.4 lakh Cr

What they filed

Q1 FY27: revenue up 0.5%, net profit up 15.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue516 385 218 422 188 −64%404 +5%172 −21%424 +0%
EBITDA371 251 64 278 76 −80%313 +25%31 −52%278 +0%
Net profit317 207 27 221 46 −85%280 +35%19 −30%255 +15%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Nuvama Wealth
    67% Revenue Growth29% 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

Guidance & targets

Volume

  • Net New Flows Volume · FY26 · Medium confidence ₹25,000-26,000 crores

    Previously ₹24,000-25,000 crores → ₹25,000-26,000 crores

    we feel that it will be in the lines what we had guided earlier, which is INR25,000-26,000 crores.

    — Ashish Kehair, MD and CEO

Revenue

  • Asset Services Revenue Recovery Revenue · by Jan-Feb 2026 · High confidence 100%
    by end of Q2, 50% of the X is now recovered on a run rate basis, and the balance 50% will come maybe by January-February.

    — Ashish Kehair, MD and CEO

  • Recurring Assets Growth (Private) Revenue · FY26 · High confidence 25-26%
    On a full year basis, again, we expect north of 25-26%.

    — Ashish Kehair, MD and CEO

Other

  • Commercial Real Estate Fund I Closure Other · middle of Q4 FY26 · High confidence ₹4,000 crores
    We want to close it by, let's say, middle of Q4 by, say, Feb end, the entire INR4,000 crores.

    — Ashish Kehair, MD and CEO

  • Mutual Fund Business Go-Live Other · April 2026 · Medium confidence Launch
    So April is where we want to go live. We will migrate this, which shall expand the target market base significantly.

    — Ashish Kehair, MD and CEO

Headcount

  • RM Addition (Private) Headcount · Annual · High confidence 15-16%
    We maintain that we will add about 15-16% a year.

    — Ashish Kehair, MD and CEO

Risks & concerns

  • Client Concentration in Asset Services

    medium

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

    Both acknowledged

  • Regulatory Changes (F&O and MF)

    medium

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

    Management acknowledged

  • Lending Book Margin Compression

    low

    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

Areas of evasion (1)

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

Q&A highlights

2 direct
Asset Services Yields and Client Loss Direct
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

Stagnant PAT at ₹250 Crore Mark Partial
Hopefully, now everything is behind us, and we come back to our 20% growth trajectory from here on because the rebasing of Asset Services should happen.

Management acknowledges the flat profit trend over 5 quarters but attributes it to the 'rebasing' of one segment while others grow.

Asked by Prayesh Jain, Motilal Oswal

Share Split and Shareholder Exit Direct
It will have no bearing on exit planning for, let's say, a PAG... exit of the shareholder and split actually do not have any correlation whatsoever.

Clarifies that the share split is purely for retail participation and not a precursor to a major private equity exit.

Asked by Manas Agrawal, Sanford C. Bernstein

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

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