Nuvama Wealth Management Limited — Q4 FY25 earnings call

Call held 29 May 2025

Management summary

Nuvama Wealth reported a 'breakout year' for FY25, characterized by strong growth across all business segments despite a challenging macro environment in the second half. The company successfully scaled its managed products (ARR/MPIS) and improved operational efficiency, leading to a significant jump in ROE to 31.5%. Management remains focused on capacity building, particularly adding relationship managers, while targeting further margin expansion in FY26.

Highlights

  • Full year PAT reached ₹986 crores, representing a significant 65% YoY growth.

  • Total Client Assets grew 24% YoY to reach ₹4.3 lakh crores.

  • Q4 Revenue stood at ₹771 crores, up 29% YoY, while Q4 PAT grew 41% to ₹255 crores.

  • Return on Equity (ROE) improved substantially from 23.6% to 31.5% for the full year.

  • Cost-to-Income ratio improved to 56% for the year, down from 60% in the previous year.

  • Nuvama Private ARR net flows exceeded ₹10,000 crores for the full year, a 52% YoY increase.

  • Asset Services revenue surged 85% YoY, driven by increased market share and higher float yields.

  • Final dividend of ₹69 per share approved, taking the total dividend for FY25 to ₹132 per share.

Concerns

  • Talent War and Compensation Inflation

Key financials

  1. Revenue ₹771 Cr +29%YoY
  2. PAT ₹255 Cr +41%YoY
  3. Full Year PAT ₹986 Cr +65%YoY
  4. ROE 31.5%
  5. Cost-to-Income Ratio 56%
  6. Total Client Assets ₹4.30L Cr +24%YoY

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 (HNI/Mid-market)
    17% Revenue Growth₹30,000 Cr MPIS Assets₹6,500 Cr MPIS Net Flows (FY25)67% Cost-to-Income Ratio
  • Nuvama Private (UHNI)
    ₹2.00L Cr Client Assets₹45,000 Cr ARR Assets₹10,000 Cr ARR Net Flows (FY25)60% ARR Revenue Contribution
  • Asset Management
    ₹11,300 Cr AUM62% AUM Growth92% Fee-paying AUM
  • Asset Services
    85% Revenue Growth₹1.26L Cr Assets under Custody/Clearing

Guidance & targets

Margin

  • Cost-to-Income Ratio Reduction Margin · FY26 · Medium confidence 100 bps
    For FY '26, I think we are actually looking at 100 basis points down.

    — Ashish Kehair, MD and CEO

Volume

  • Total Core Net Flows Volume · FY26 · High confidence ₹23,000 - 24,000 crores
    So, if I add all this together, we come back to some INR23,000 - 24,000 crores at the bare minimum is what we target.

    — Ashish Kehair, MD and CEO

  • Lending Book Growth Volume · FY26 · Medium confidence 20%
    And we want a 20% growth, that means about INR1,000 crores at an average level. So, by end of year, it should have grown by INR1,800-2,000 crores is what ideally we would want to target.

    — Ashish Kehair, MD and CEO

Profitability

  • Asset Management Breakeven AUM Profitability · FY27 · Medium confidence ₹20,000 crores
    I think at INR20,000 crores of assets, we think we will be breakeven... I think FY '27 somewhere around the middle is when we should start seeing that business breakeven on a quarterly basis.

    — Ashish Kehair, MD and CEO

Capacity

  • Real Estate Fund AUM Capacity · next 2-3 quarters · High confidence ₹4,000 crores

    From ₹1,700 crores today

    The next phase will be to take this fund from current INR1,700 crores to INR4,000 crores in maybe next two to three quarters.

    — Ashish Kehair, MD and CEO

Risks & concerns

  • Talent War and Compensation Inflation

    high

    Ashish Kehair described the current market hiring frenzy as a 'race to death' and expects many firms to be decimated when the cycle turns.

    Management acknowledged

  • Market Volatility and Denominator Effect

    medium

    Management noted that a 50% market rally would increase revenue but mathematically lower the reported yield percentage due to the denominator effect of MTM assets.

    Management acknowledged

  • Regulatory Uncertainty in F&O

    medium

    While F&O regulations caused uncertainty, management believes the business is relatively inelastic and the removal of intraday peak limits is a positive development.

    Both downplayed

Areas of evasion (1)

  • Deflected specific details on the rumored PAG exit, stating they are 'at the same page' as the analyst regarding news reports.

Q&A highlights

3 direct
Asset Services Revenue Jump vs. Flattish Assets Direct
So typically, average assets, if you see, within that, the float has actually gone up... And some yield pickup has also happened because if you see now the yield is inching towards 2%.

Explains why revenue grew 85% despite flattish sequential assets; highlights the high-margin nature of the clearing float.

Asked by Prayesh Jain, Motilal Oswal

Cost-to-Income Ratio Trajectory Direct
For FY '26, I think we are actually looking at 100 basis points down... on a full year basis, you should see and then 100 basis points is what we want to target.

Provides a specific efficiency target for the next fiscal year, balancing aggressive RM hiring with margin expansion.

Asked by Prayesh Jain, Motilal Oswal

Asset Management Breakeven Timeline Direct
I think at INR20,000 crores of assets, we think we will be breakeven... I think FY '27 somewhere around the middle is when we should start seeing that business breakeven on a quarterly basis.

Sets a clear milestone for when the nascent Asset Management business will stop being a drag on consolidated profits.

Asked by Lalit Deo, Equirus Securities

2 min read 5 chapters

Detailed narrative

Breakout Year Driven by Diversification

Nuvama characterized FY25 as a breakout year, with PAT growing 65% to ₹986 crores and ROE expanding to 31.5%. This performance was underpinned by a 24% growth in client assets to ₹4.3 lakh crores. Management highlighted that the platform's resilience was tested in a tough Q4 market environment, yet they managed to maintain strong execution across Wealth, Private, and Asset Services segments.

Strategic Shift Toward Managed Products

A key theme of the call was the focus on 'annuity-style' revenue through managed products (ARR in Private and MPIS in Wealth). MPIS assets grew 29% to reach ₹30,000 crores, while Private ARR assets grew 33% to ₹45,000 crores. For FY26, management is targeting ₹23,000 - 24,000 crores in total core net flows, with a significant portion expected from these managed product categories.

Asset Services Emerges as a High-Margin Engine

The Asset Services segment saw an 85% YoY revenue jump, driven by a 38% increase in assets under custody to ₹1.26 lakh crores. Management explained that revenue growth outpaced asset growth due to higher yields on the cash float (inching toward 2%) and the full-quarter impact of self-clearing for their own wealth business. They expect the 'new normal' for clearing yields to be between 1.8% and 1.9%.

Asset Management Path to Profitability

The Asset Management business, while currently at a 130% cost-to-income ratio, has a clear roadmap to breakeven. Management expects to reach quarterly breakeven by mid-FY27, contingent on reaching ₹20,000 crores in assets (currently at ₹11,300 crores). The segment is seeing traction in its commercial real estate fund, which made its first marquee deployment in a Delhi office asset with an equity value of over ₹460 crores.

Balancing Aggressive Capacity Building with Efficiency

Nuvama added approximately 350 Relationship Managers (RMs) over the last 18 months, which has kept the fixed cost base high. Despite this investment, the company improved its consolidated cost-to-income ratio to 56%. Management plans to continue investing in talent but targets a further 100 bps reduction in the cost-to-income ratio for FY26 as the productivity of new cohorts improves.

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