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Financial Highlights:

Source: Company Filings; stockaxis Research

Q4FY25 Result Highlights

In Q4FY25, Nuvama reported revenues of Rs 771 cr, reflecting a 29% YoY and 7% QoQ growth. Profit After Tax (PAT) for Q4FY25 came in at Rs 255 cr, grew by 41% YoY and 1% QoQ. In terms of segment performance, Wealth and Asset Management businesses delivered steady growth with revenues rising 20% YoY, Asset Services had a breakout year with revenues up 85% YoY, and Capital Markets recorded a 16% YoY revenue increase. The retention yield, excluding capital markets, remained stable at 54 basis points. Total AUM rose 24% YoY, supported by solid net inflows of Rs 2,850 cr during Q4 and Rs 20,100 cr for FY25, with the Asset Services segment being the key growth driver. The company continued investing in expansion by hiring additional relationship managers (RMs). Operating expenses for Q4 stood at Rs 435 cr, and while the cost-to-income (C/I) ratio rose sequentially, it declined YoY from 60.0% to 56.4%. Despite expectations for the C/I ratio to remain elevated, the company maintains a strong growth outlook.

As per the management, India’s financial sector performed strongly in FY25 despite a second-half slowdown and market correction, with growth expected to continue at a more moderate pace amid evolving uncertainties. Nuvama delivered healthy growth across segments. PBT margins improved from 38% to 45% and ROE rose from 23.6% to 31.5%. Client assets and market share continued to grow, supported by sustained momentum in Wealth Management net flows, expansion in sales capacity, and geographic reach including offshore presence. The company also invested significantly in strengthening its digital infrastructure, including AI integration. Asset Management AUM grew 62% YoY, driven by strong performance and the first close of its maiden commercial real estate fund. Asset Services saw meaningful growth in both international and domestic segments, while Capital Markets businesses delivered top-quartile performance, gaining market share in Institutional Equities and Investment Banking.

Other Key Highlights (FY25)

• Nuvama Wealth’s overall AUM grew 24% YoY to Rs 4.3 lk cr in Q4FY25. The Private segment was the largest contributor with Rs 2 lk cr (vs Rs 1.7 lk cr in Q4FY24).
• Net flows stood at Rs 2,850 cr, of which Rs 2570 cr came from the Wealth business; majority of these were in managed products.
• Net flows are expected at Rs 31,300 cr in FY26 and Rs 35,600 cr in FY27; AUM is projected to grow at 18% CAGR to Rs 60,000 cr by FY27.
• Asset Services contributed Rs 200 cr in Q4FY25 revenue (+85% YoY), while Institutional Equities & Investment Banking added Rs 160 cr (+16% YoY).
• Together, these segments made up 47% of Q4FY25 revenue (vs 42% in Q4FY24). Asset Services revenue is expected to grow at 16% CAGR, and IE/IB at 10% CAGR over FY25–27.
• The Wealth business expanded through fresh RM hiring in both Wealth and Private divisions. Focus remains on scaling ARR within the Private segment.
• C/I ratio in Wealth rose to 69.2% in Q4 (from 67.1% in Q3); Private division’s ratio increased to 66.1% (from 62.5%) due to capacity addition.

Key Conference call takeaways

• Wealth Management revenue stood at Rs 398 cr in Q4FY25, up 21% YoY, and Rs 1,428 Cr in FY25, up 20% YoY.
• PBT from Wealth Management reached Rs 128 cr in Q4, up 13% YoY, and Rs 475 Cr in FY25, up 14% YoY.
• Client assets under Wealth Management were Rs 2,93,298 cr as of Q4FY25, growing 18% YoY.

Nuvama Wealth and Private Performance

• Nuvama Wealth reported Q4 revenue of Rs 215 cr, up 17% YoY, and PBT of Rs 66 cr, up 14% YoY.
• The MPIS business saw Q4 revenues grow 50% YoY, led by strong performance in managed products and fixed income.
• FY25 net flows for MPIS were Rs 6,460 cr, contributing 28% of the opening assets, driven by healthy annuity product flows.
• Nuvama Private posted Q4 revenue of Rs 183 cr, up 24% YoY, and PBT of Rs 62 Cr, up 12% YoY.
• FY25 ARR flows grew 52% YoY to Rs 10,097 cr, highlighting robust recurring income momentum.
• Investments for long-term growth continued with 4 RMs added in Q4 and 12 in FY25.
• The Dubai offshore unit is now fully functional, and final approval has been secured for the Singapore entity.

Asset Management Business

• Q4FY25 management fees were Rs 17 cr, up 31% YoY, while FY25 management fees totaled Rs 59 Cr, up 30% YoY.
• Fee-paying AUM now constitutes 92% of closing AUM, supported by the Prime commercial real estate fund’s first close.
• Total AUM stood at Rs 11,307 cr at the end of Q4FY25, up 62% YoY.
• Public Markets AUM grew 145% YoY to Rs 5,064 cr, with 96% of the increase from net new money.
• Commercial Real Estate AUM was reported at Rs 1,747 cr, reflecting strong traction.

Asset Services and Capital Markets

• Q4FY25 Asset Services revenue was Rs 198 cr, up 85% YoY, driven by momentum from both FII and DII clients.
• Capital Markets revenue rose 16% YoY to Rs 163 cr, despite some softness in equity markets.
• The company continued to sustain market share in Institutional Equities and has a strong IB pipeline.
• Segment PBT surged 63% YoY to Rs 216 Cr in Q4 and grew 127% YoY to Rs 855 cr in FY25.
• Client assets under Asset Services stood at Rs 1,26,046 cr as of Q4FY25, registering 38% YoY growth.

Strategic & Operational Developments

• RM attrition was limited to 3–4 within the top 350 (Big League), though total attrition among others was 25–30%. RM headcount is projected to grow 10–15% in FY26.
• The multi-asset advisory platform is fully functional and widely used; GenAI integration is planned.
• RM compensation across the industry has risen sharply, but Nuvama remains focused on sustainable team building.
• The Dubai business reached operational breakeven and will expand capacity. Final approval for the Singapore office has been received.
• A commercial real estate fund was closed with the first deployment made in Q4.
• The company is open to global partnerships and inorganic growth opportunities, if strategic and reasonably priced.

Outlook & valuation

Nuvama Wealth demonstrated robust earnings growth for the quarter that ended Q4FY25 led by strong traction in wealth and asset management business. We believe that wealth and asset management will continue to be key growth driver and constitute 75-80% of the earnings. Nuvama boasts of consistent track record of growth, Integrated and differentiated platform, Strong promoters with experienced management team, Scaled & Multi-client segments with reach across India, Unique hybrid fulfilment model of Technology + RMs, Proven execution with diversified & scalable revenue streams and strong capital base, Unique Business Model, enabling value and seamless client solutions across ecosystem, Comprehensive wealth management platform with exhaustive suite of offerings, Established market position, superior return ratios, Nuvama Wealth is well positioned in this evolving wealth management space.

The NII is expected to inch-up going ahead given management’s reinvigorated focus on lending solutions, especially after achieving high ROEs (31.5% in FY25 vs 24% in FY24). Nuvama’s spectacle is its asset services business (only non-bank integrated platform), which commands ~20% market share of new clients and has seen secular growth in revenues despite a slowdown in retail volumes, unlike listed retail brokers. With increasing penetration of financial advice within HNI/UHNI segments, we believe the secular growth in client assets will continue, through innovative products and expanding RM-led distribution combined with deepening of the market into tier 2/3 cities. We believe Nuvama is in its growth phase and is well placed to benefit from its increasing scale, complete suite of product portfolio, and inherent industry tailwinds. The company has demonstrated its ability to generate profitability while sustaining strong growth. At a CMP of Rs. 7215, the stock is trading at 21x FY27E. We maintain a HOLD rating on the stock.