Motilal Oswal Financial Services has reiterated its BUY call on Nuvama Wealth Ltd, lifting its target price to Rs2,100 from an earlier estimate, implying a 16% upside over the stock's current market price of Rs1,804. The revised target, based on a sum-of-the-parts valuation, implies an FY28E price-to-earnings multiple of 23 times.

A Quarter That Beat Across the Board

Nuvama's 1QFY27 operating revenue came in at Rs9.1 billion, up 18% year-on-year and a comfortable 9% ahead of the brokerage's own estimate — a beat it attributes chiefly to a striking 22% surprise in the capital markets segment. Profit after tax followed suit, rising 16% year-on-year to Rs3.1 billion, a 7% beat, even as the PAT margin eased slightly to 33.6% from 34.3% a year earlier.

Costs, however, ran hotter than expected. Total operating expenses grew 19% year-on-year to Rs5 billion, roughly 10% above the brokerage's estimate, driven by a 17% jump in employee costs. That pushed the cost-to-income ratio up to 55.1% from 54.7% in the year-ago quarter. EBITDA still advanced 17% year-on-year to Rs4.1 billion, with margins holding largely steady at 45%.

Segment Scorecard

What Management Is Signalling

On the earnings call, management flagged a genuine milestone: client assets have now crossed the Rs5 trillion mark, with quarterly revenue exceeding Rs9 billion and PAT topping Rs3 billion for the first time — a record quarter by the company's own account. Forty new relationship managers were added to the wealth franchise during the quarter to chase growing demand from Tier-2 and smaller cities, which now contribute over 35% of MPIS assets.

On the private banking side, competitive intensity in the ultra-high-net-worth segment remains elevated, though management reiterated its medium-term cost-to-income ratio guidance of 60–62% and its target of drawing 20–22% of opening assets under management as net inflows in FY27. Offshore operations are scaling steadily: the Dubai desk has already broken even, while Singapore is expected to reach breakeven by the end of the fiscal year.

In asset management, the company is evaluating a REIT platform over the next 12 to 18 months and continues to await regulatory approval to launch its own specialized investment fund offerings. Management expects quarterly losses in this business to peak at Rs350–360 million before improving from the fourth quarter onward. On capital markets, fixed income emerged as the standout growth driver, with foreign portfolio investors flipping from net sellers to net buyers as the quarter progressed.

Estimates Revised Higher

Motilal Oswal has raised its revenue estimates by 7–9% for FY27–28, on the back of consistent wealth management performance and a stronger-than-expected capital markets trajectory. This flows through to a 7–11% upgrade in earnings estimates over the same period.

The Bottom Line for Investors

The recovery in the asset services franchise following last year's large-client exit, combined with a resurgent equity capital markets pipeline and steady wealth flows, underpins Motilal Oswal's conviction. The brokerage's BUY rating stands, with the revised Rs2,100 target price offering 16% headroom from current levels — even as investors would do well to watch the cost-to-income trajectory in the private banking arm, which missed estimates this quarter.

Sources: Motilal Oswal Financial Services — Nuvama Wealth 1QFY27 Results Update, August 1, 2026; Company filings.