Nuvama Wealth Management Limited
Q1 FY26
Call date · August 14, 2025
1 · Management Commentary
Key Positives
- Consolidated client assets grew 19% YoY to INR4.6 lakh crores.
- Revenue increased 15% YoY to INR770 crores; operating PAT up 19% YoY to INR264 crores, with ROE at 30%+.
- Cost-to-income ratio improved to 55% (vs 56% YoY).
- Wealth business: MPIS assets up 30% YoY to INR32,500 crores; MPIS net flows at INR2,300 crores (+64% YoY); MPIS revenue now 54% of Wealth revenue.
- Private business: ARR assets up 25% YoY to INR48,300 crores; net flows strong at INR2,900 crores; ARR revenue is 66% of Private revenue.
- Asset Management AUM up 54% YoY to INR11,800 crores; 93% fee-paying.
- Asset Services revenue up 46% YoY; new client onboarding robust.
- Technology investments (MARS, One Platform) enhancing productivity and client experience.
Key Negatives
- Capital Markets revenue down 10% YoY (impacted by absence of prior year M&A deal and market activity).
- Asset Management net flows negative in Q1 due to public market volatility (improving from June onwards).
- Asset Services impacted by Jane Street regulatory issue, leading to some near-term revenue impact.
- Institutional Equities volumes remain moderate; FPI flows affected by global trade/tariff uncertainties.
Forward Guidance
- Capex: Not specifically disclosed.
- New products/segments: Launch of RTA and trusteeship services for PMS/AIF clients; private credit fund to start by end of Q3; SIF (MF) license application in progress.
- Expected client wins/losses: Strong pipeline in Asset Services; Jane Street may resume, but growth expected even without them.
- Revenue/margin outlook: Confident of delivering INR19,000–20,000 crores net flows in FY26; cost-to-income in Wealth to improve by 100 bps; overall C/I to end at similar levels as prior year.
- Other initiatives: Focus on technology, productivity, and expanding value-added services; targeting 20–25% CAGR in profits over next several years.
2 · Q&A Highlights
Q 1 (Client Concentration): What is the extent of client concentration in revenues, especially among top clients?
A (Management):
• Top 5 clients contribute not more than 5–10% on a consolidated basis; composition changes frequently except in domestic institutional equities.
Q 2 (Jane Street/Asset Services Impact): What is the impact of Jane Street’s regulatory issue on Asset Services revenue and growth?
A (Management):
• Even assuming zero revenue from Jane Street, Asset Services will still see early double-digit growth for FY26; full recovery to prior levels expected by October/November due to strong pipeline.
Q 3 (Asset Services AUM/Yield): Why did Asset Services AUM decline and yields rise? What is the sustainable yield?
A (Management):
• AUM decline due to shift of INR10,000 crores to self-clearing (lower-yield assets removed); yields now 1.95–2.4% depending on market rates; Q1 yield at 2.1% may fall to 2% if rates drop further.
Q 4 (Cost Trends): How should we interpret the sequential decline in opex and future cost trends?
A (Management):
• Q4 opex was elevated due to one-offs (CNBC deal, offsites, conferences); normalized Q1 opex at INR105–110 crores/quarter; expect 7–8% YoY increase in full-year opex.
Q 5 (Net Flow Guidance): What is the outlook for net flows in Wealth and Private businesses?
A (Management):
• Confident of INR19,000–20,000 crores net flows in FY26 (Wealth MPIS: INR7,000–8,000 crores; Private: INR12,000 crores); Private net flows to be 25–30% of opening ARR assets.
Q 6 (RTA/Trusteeship Launch): What is the rationale for launching RTA and trusteeship services?
A (Management):
• Targeting PMS/AIF clients for a one-stop solution; expected to improve market share in new registrations; cost impact minimal.
Q 7 (Industry Growth & Market Share): How will industry growth and new entrants affect Nuvama’s market share?
A (Management):
• Industry to grow 8–9x over 10 years; organized players will gain share from unorganized (agents, IFAs); Nuvama aspires for 20–25% profit CAGR.
Q 8 (Institutional Equities/IB Outlook): How will Jane Street and market activity affect Institutional Equities and IB?
A (Management):
• Q1 revenue growth in IB (fixed income); IE flattish; Jane Street impact may reduce PAT by INR15–20 crores for FY26, but recovery possible if market volumes pick up.
3 · Other Key Numbers
- Consolidated client assets: INR4.6 lakh crores (+19% YoY)
- Q1 revenue: INR770 crores (+15% YoY)
- Q1 operating PAT: INR264 crores (+19% YoY)
- ROE: 30%+
- Cost-to-income ratio: 55% (Q1 FY25: 56%)
- Wealth client assets: INR1.05 lakh crores (+20% YoY)
- Wealth MPIS assets: INR32,500 crores (+30% YoY)
- Wealth MPIS net flows: INR2,300 crores (+64% YoY)
- Wealth MPIS revenue: +59% YoY; share of Wealth revenue: 54% (vs 40% YoY)
- Wealth cost-to-income: 66%
- Wealth operating PBT: INR75 crores (+18% YoY)
- Private client assets: INR2.2 lakh crores (+17% YoY)
- Private ARR assets: INR48,300 crores (+25% YoY)
- Private net flows (ARR): INR2,900 crores
- Private revenue: INR155 crores (+19% YoY)
- Private cost-to-income: 69%
- Private operating PBT: INR48 crores (+19% YoY)
- Asset Management AUM: INR11,800 crores (+54% YoY); 93% fee-paying
- Asset Services assets under custody/clearing: INR1.27 lakh crores (+19% YoY)
- Asset Services revenue: +46% YoY
- Capital Markets revenue: –10% YoY
- Number of Private RMs: 137 (up from 118 YoY)
- Broking revenue (Wealth): INR240 crores/year (40% F&O, 60% cash)
- Broking revenue (Institutional): INR180–200 crores F&O
- Net debt increase: INR1,000 crores (INR500 crores loan book, INR300 crores working capital, balance client facilitation/margin)
- Asset Services AUM shift to self-clearing: INR10,000 crores
- SIF (MF) license: applied, first SEBI inspection completed
- Net flows guidance: INR19,000–20,000 crores for FY26
- Opex guidance: INR105–110 crores/quarter (normalized); 7–8% YoY increase for FY26
- Market share: Top 10 international Asset Services clients contribute 30–35% of revenue; no excessive concentration
- Private client base: 4,400+; 100% have potential >INR25 crores AUM
All figures as stated in the call. If not disclosed, marked as such.