Nuvama Wealth Management Q4 FY26 earnings call

Nuvama Wealth Management reported overall revenues of approximately INR3,100 crores and an operating profit after tax of about INR1,050 crores for FY26. The year was characterized by significant market volatility^🌐 and geopolitical uncertainties, which tested the company's resilience. Despite these challenges, the company achieved growth, with profits from wealth growing by 23% and asset services by 14% year-on-year, demonstrating its ability to navigate complex market conditions.

The Wealth Management segment continued its strong growth trajectory, with overall profits increasing by 23% for FY26. Managed Products and Investment Solutions (MPIS) revenue grew by 38% for the full year, with assets growing by 32% and net flows by 38% (30% over opening assets). RM productivity saw a significant jump of 25% in revenue per RM, attributed to the seniorisation of the team and effective technology adoption, including AI tools for portfolio advisory and rebalancing.

Nuvama Private segment's ARR assets reached INR54,000 crores, with net flows at 22% of opening assets. Revenue from this segment grew by 24%, and PBT also increased by 24%. Asset Services recovered strongly from a Q1 decline, with full-year revenues growing by 12% and Q4 revenues exceeding Q1. The segment's cost-to-income ratio improved by 100 basis points, and it holds a 22% market share in its chosen segments, highlighting its robust recovery and operational efficiency.

Nuvama is actively expanding its Asset Management capabilities. The commercial real estate fund successfully closed at INR4,000 crores, with a new fund targeting INR3,000-INR3,500 crores planned for H2 FY26. The company also launched Private Equity Fund Crossover 4, aiming to raise INR1,000-INR1,500 crores over the next 6-10 months. A new Private Credit Fund, targeting INR1,000-INR1,500 crores, is expected to launch by Q2 FY27, with leadership hires already in place to drive this growth.

The Capital Markets segment experienced moderation in secondary market activity, with equity cash ADT declining by 6% and futures ADT by 14%, though options grew 8% YoY. Despite this, Nuvama maintained its market share in IPOs (18-19% by value, 15% by deals). The fixed income business within capital markets showed healthy growth of 35% year-on-year, now contributing 50% to the IB top line, demonstrating its resilience and counter-cyclical strength in volatile times.

Nuvama is investing heavily in technology and AI, implementing solutions for RMs across the value chain, leading to productivity improvements of 10-15% in Nuvama Private. New offerings like 'Virasat' (an estate and legacy planning tool) and an industry-first multicurrency module for portfolio reporting have been launched. The company is also pursuing GC-LC tie-ups to expand its international client base and plans to launch RTA and trusteeship services by mid-Q3 FY27 to further enhance its domestic market share.

The firm-level cost-to-income ratio stood at 56% for FY26. The wealth management segment saw its cost-to-income ratio improve by 80 basis points YoY, with a 130-150 basis points compression this year. Management aims for a 100 basis point reduction annually over a 3-4 year period, balancing productivity gains with strategic capacity additions. The overall ROE for FY26 was a healthy 28%, reflecting efficient cost management and strong underlying business performance.