NUVAMA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 05 Nov 25, 7:43 am

Fundamental Rating: 4.4

📊 Financial Overview

• Profitability: PAT surged to ₹221 Cr from ₹27.5 Cr QoQ; EPS at ₹216
• Margins: ROCE at 30.6%, ROE at 32.6% — excellent capital efficiency
• Debt Profile: Debt-to-equity ratio of 0.39 — moderate leverage, manageable risk
• Dividend Yield: 1.98% — attractive for income-focused investors

📈 Valuation Metrics

• P/E Ratio: 33.1 — slightly above industry average of 17.1
• P/B Ratio: ~13.2 — premium valuation relative to book value ₹538
• PEG Ratio: 0.23 — indicates strong earnings growth at a reasonable valuation
• Intrinsic Value: Estimated around ₹6,600–₹6,900 based on earnings and sector multiples

🏢 Business Model & Competitive Edge

• Core Operations: Nuvama Group (formerly Edelweiss Securities) offers wealth management, broking, and investment banking services
• Moat: Strong brand in wealth advisory, diversified financial services, and expanding HNI client base
• Growth Drivers: Rising retail participation, digital platforms, and expansion in asset management and advisory

📌 Entry Zone Recommendation

• Suggested Entry: ₹6,600–₹6,900 — near DMA200 and intrinsic value
• Technical Indicators: RSI at 58.3 (neutral), MACD positive — stable momentum

📈 Long-Term Holding Guidance

• Hold for long-term if accumulated near support; ideal for investors seeking exposure to India’s growing financial services sector
• Monitor quarterly earnings and client acquisition trends

✅ Positive

• Strong ROE and ROCE with robust earnings growth
• Low PEG ratio indicates undervaluation relative to growth
• DII holding increased by 1.24%
• Consistent dividend payout

⚠️ Limitation

• FII holding declined by 0.84%
• Stock down ~17% from 52-week high
• Volume below weekly average — signals reduced short-term interest

📰 Company Negative News

• FII outflows amid sector rotation and valuation concerns

🌟 Company Positive News

• Q2 FY26 PAT up 376% QoQ; strong performance in wealth and broking segments
• New digital onboarding platform launched to scale retail advisory

🏭 Industry

• Financial services industry P/E at 17.1 — Nuvama trades at a premium
• Sector driven by rising financial literacy, digital adoption, and capital market participation

🧾 Conclusion

• Nuvama is a high-growth financial services firm with strong fundamentals and scalable business model
• Accumulate near support zones for long-term value; monitor institutional flows and digital expansion