Citi initiates coverage on Nuvama Wealth with ‘buy’, prefers it over 360 One Wealth – here's why

livemint.com:

Nuvama Wealth Management with a ‘Buy’ rating and a target price of ₹4,110, representing approximately a 27 percent potential upside. Nuvama's strength lies in its multi-product and open-architecture distribution model in the wealth sector. The company has a diverse customer focus, catering to Ultra High Net Worth Individuals (UHNI) through Nuvama Private and High Net Worth Individuals (HNI) and affluent clients through Nuvama Wealth.

The company's extensive presence positions it well to capitalise on the increasing formalisation of managed wealth in India, said the brokerage. Listed in September this year, the stock has risen over 20 percent since then. It has given positive returns in all 3 months, rising over 21 percent in October, 7.5 percent in November, and over 3 percent in December so far.

The stock hit its record high of ₹3,549.95 earlier this month on Dec 4. It has now advanced over 68 percent from its 52-week low of ₹2,111, hit on October 5. In 2020, investment firm PAG picked up a stake in the wealth management business of Edelweiss Financial Services and announced the demerger and subsequent listing of its wealth management business, Edelweiss Securities.

PAG owns a controlling stake of 56 percent in Nuvama Wealth. Citi informed that the company's valuation is based on a 22x multiple of the estimated earnings per share (EPS) for September 2025. It expects the firm to achieve an 18 percent EPS compound annual growth rate (CAGR) from fiscal year 2024 to 2026, with a significant 60 percent year-over-year growth anticipated in fiscal year 2024.