Nuvama Wealth Management Ltd Q2 FY26 Earnings Analysis

- Wealth Management and Asset Management businesses are expected to grow faster than last year. - Asset Services will still achieve growth, despite challenges like the Jane Street impact. - Institutional Equity (IE) might face some impact with an estimated INR15-16 crores PAT hit this year but expected to resume growth afterward. - Overall, the company aspires to grow net profits by 20-25% compounded annually over the next 10 years. - The mutual fund asset base expanded from INR50 lakh crores to INR75 lakh crores in two years, expected to compound significantly. - Market penetration is currently below 15% and expected to double in 10 years, leading to an 8x-9x market size expansion. - Transactional revenues and flows in private divisions show strong momentum with net flows around INR2,900 crores quarterly. - Capital markets' activity is recovering with improved secondary market volumes and IPO pipeline revival anticipated in H2.

- Aspiration to achieve similar 20-25% compounded growth in net profits over the next 10 years, driven by expanding market size (Page 16). - Wealth Management and Asset Management businesses expected to grow faster than last year, showing strong growth momentum (Page 17). - Asset Services growth to remain positive despite some headwinds; Institutional Equity may see an INR15-16 crore PAT impact this year but will resume growth thereafter (Page 17). - Operating PBT for Wealth business grew 18-19% YoY, with a steady cost-to-income ratio (~66%) indicating efficient growth (Pages 6-7). - Managed Products and Investment Solutions to drive more than 50-60% growth in annuity income stream this year (Page 3). - Overall company revenue grew 15% YoY with client assets growing 19%; growth expected to sustain through focused client acquisition and product expansion (Page 6). - No significant negative impact from external developments on core business profitability or growth prospects (Page 17).

- Nuvama Wealth Management is planning to add two value-added services in Asset Services: registrar and transfer agent (RTA) service and trusteeship services. Subsidiaries for these will be floated within the next 6 months. - In Asset Management, focus is on deployment of funds, including raising a second leg of a commercial real estate fund targeting an additional INR 2,000-2,200 crores over the next 6-9 months. - Private credit is a new product category planned to start by the end of Q3. - Investment in technology is ongoing, including portfolio solutions tools (MARS) and a unified digital platform ("One Platform") to support a growing number of relationship managers (potentially 3,000-4,000 over 3-4 years). - No material capital expenditure impacts expected from the private equity shareholder matter, as it is a shareholder issue with no bearing on company operations.

- Nuvama Wealth Management is targeting to raise INR 4,000-5,000 crores through 3 private market funds over the next 3 quarters, including a pre-IPO private equity fund called Crossover 4. - They plan to start a new product category, private credit, by the end of Q3. - The company has also applied for a Mutual Fund (MF) license to start a Scheme of Investment Funds (SIF) business; the SEBI inspection has happened, and they expect to launch this within 4-5 months after license approval. - No specific mention of new equity fundraising was made; private equity deal talk is a shareholder matter and not expected to impact company growth or performance. - Net debt increased by INR 1,000 crores this quarter, used partly for loan book growth and working capital, but this is operational rather than a new fundraising effort.

- As per Ashish Kehair, the current assets in MPIS (Wealth) are about INR 32,000-33,000 crores. - Approximately 30% of MPIS assets (~INR 7,000-8,000 crores) contribute to the orderbook. - The Private division adds another INR 12,000 crores. - Total orderbook/pending orders currently stand at around INR 19,000-20,000 crores. - The company is reasonably confident about delivering on this orderbook.