Synopsis:
Citi has rated Nuvama as “Buy” with a Rs. 10,000 target price, highlighting undervaluation in asset servicing, resilience against large-client losses, strong wealth management performance, and potential investment banking upside, indicating a 63% upside from current levels.
This Wealth Management company is an Indian financial services firm providing wealth management, investment advisory, and portfolio solutions, and is now in the spotlight after Citi set a target of Rs. 10,000 per share.
With market capitalization of Rs. 22,086 cr, the shares of Nuvama Wealth Management Ltd is closed at Rs. 6,115 per share, increasing by 3% in today’s market session making a high of Rs. 6,237.50, from its previous close of Rs. 6,032.50 per share.
Target & Rationale
Citi has given Nuvama a “Buy” rating with a target price of Rs. 10,000, implying a 63% upside from the current levels. The brokerage highlights that the market is undervaluing Nuvama’s asset servicing business, suggesting that the current stock price does not fully reflect the segment’s earnings potential.
Citi said investor sentiment has been a concern over the possible loss of a major client. However, it dismissed the notion that Nuvama would suffer substantial losses if a large client were to leave.
Approximately one-third of Nuvama’s revenues are not linked to derivatives, reducing exposure to market volatility. Regulatory risks are considered moderate, with any profitability impact from asset servicing unlikely to exceed 50%.
Additionally, strong wealth management flows provide stable revenue, while investment banking is expected to deliver positive surprises, offering potential upside beyond current projections. Overall, Citi is bullish on Nuvama, citing undervaluation, resilience, and growth potential across key segments.
About the company
Nuvama Wealth Management Ltd is a financial services firm in India offering a range of wealth management solutions, including investment advisory, portfolio management, and financial planning for individual and institutional clients.
The company reported strong year-on-year growth, with sales rising 18% to Rs. 1,123 crore from Rs. 949 crore in Q1FY25, operating profit increasing 24% to Rs. 612 crore, and net profit up 19% at Rs. 264 crore. Earnings per share also grew 17% to Rs. 73.31 compared to Rs. 62.44 in Q1FY25.
Written by Manideep Appana
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