Nuvama Wealth Management Ltd shares surged 12.80 per cent to hit Rs 5,760.80 level in Tuesday's trade. Last checked, the stock was trading 12.34 per cent up at Rs 5,736.90. At this price, it has gained 77.66 per cent in a year.
The company's operating profit after tax (PAT) came at Rs 252 crore in the December 2024 quarter (Q3 FY25), up 43 per cent year-on-year (YoY). Revenue from operations was at Rs 723 crore in Q3 FY25, registering an uptick of 30 per cent YoY.
"Nuvama reported strong results in a quarter where capital markets were jittery. AUM grew sequentially to Rs 4.5 trillion (lakh crore) (+2.4 per cent QoQ, +36.4 per cent YoY) across segments – wealth 1.8 per cent QoQ, private +1.4 per cent QoQ, AMC +9.5 per cent QoQ, asset services 4.1 per cent QoQ – on the back of sustained net new money despite MTM losses indicating sticky customer profile," JM Financial stated.
"Overall opex moderated with scale (CIR at 46.1 per cent vs 48.2 per cent QoQ) led by rationalisation of RM additions and other opex resulting in PAT at Rs 250 crore (+43 per cent YoY, -2.2 per cent QoQ). Management highlighted that clearing of wealth business transactions is now moved to the same business head vs under asset services earlier to realise operating and capital efficiencies. The NII is expected to inch up going ahead given mgmt.'s reinvigorated focus on lending solutions, especially after achieving high ROEs (31.6 per cent in Q3 FY25 vs 27 per cent in Q3 FY24)," the domestic brokerage added.
"Nuvama has corrected c.31 per cent from its peak and currently trades at 15.0x FY27e EPS. 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, as indicated in our initiating coverage report. We revise our FY25/FY26/FY27 earnings estimates upwards by 4.8 per cent/3.9 per cent/3.8 per cent and value Nuvama using SoTP-based TP (target price) of Rs 9,000 (at 26x FY27e EPS of Rs 340)," it further stated.
On technical setup, the counter traded higher than the 5-day and 10-day simple moving averages (SMAs) but lower than the 20-day, 30-, 50-, 100-, 150-day and 200-day SMAs. The stock's 14-day relative strength index (RSI) came at 46.65. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The company's stock has a price-to-equity (P/E) ratio of 30.45 against a price-to-book (P/B) value of 30.45. Earnings per share (EPS) stood at 167.73 with a return on equity (RoE) of 32.10.
As of December 2024, promoters held a 54.93 per cent stake in the company.