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Revenue in line; operational efficiency boosts PAT

* Nuvama Wealth’s (NUVAMA) 3QFY25 operating revenue grew 30% YoY to INR7.2b (in line), driven by 19% YoY growth in wealth management revenue (in line), flat AMC revenue (30% miss), and 46% YoY growth in capital market revenue (in line). For 9MFY25, operating revenue grew 45% YoY to INR21.3b.

* Total operating expenses grew 19% YoY to INR3.9b (6% lower than est.), driven by 26% YoY growth in employee expenses (6% lower than est.) and 1% YoY growth in other opex (7% lower than est.). The cost-toincome ratio declined to 53.9% in 3QFY25 vs. 58.7% in 3QFY24 (our est. of 55.5%). Better-than-expected operational efficiency was largely due to lower-than-estimated costs in Nuvama Private and Nuvama Capital Markets.

* PAT grew 43% YoY to INR2.5b (4% beat), driven by operational efficiency. For 9MFY25, PAT grew 76% YoY to INR7.3b.

* In 3QFY25, the closing AUM for the wealth business grew 28 YoY to INR3.1t and for the asset management business it grew 71% YoY to INR113b.

* While Nuvama Wealth and Nuvama AMC reported strong YoY growth in net new flows at INR22.3b/INR12b in 3QFY25 (vs. INR6.4b/INR2.4b in 3QFY24), Nuvama Private’s net new flows declined to INR1b (INR53bin 3QFY24).

Valuation and view

* We expect Nuvama to deliver a CAGR of 23%/24%/29% in AAUM/revenue/ PAT over FY24-27E, led by growing wealth management and asset management business. Stable momentum in the capital market segment should strongly support the company’s overall profitability. We maintain BUY rating on Nuvama with a TP of INR8,800, based on 26x Sep’26E EPS.

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