Citi has reiterated its buy rating on Nuvama Wealth and Investment with a target price of ₹10,000, arguing that the company’s asset servicing business remains undervalued at current levels despite recent sentiment concerns. The brokerage noted that worries around a potential large client loss, ripple effects, and regulatory risks have weighed on investor perception, but it refuted the view that Nuvama faces significant losses from a large client exit.
Citi said the company continues to add new clients and maintain strong business momentum, with one-third of revenues generated from non-derivative businesses. It estimates the regulatory impact on profit before tax to be below 50%, contrary to market fears. The brokerage added that strong wealth management inflows and potential upside from the investment banking business are likely to serve as positive triggers in the medium term.
It concluded that while regulatory risks remain a key monitorable, current valuations understate the strength of Nuvama’s diversified franchise and earnings visibility, justifying a continued buy stance.
Disclaimer: The views and recommendations made in this article are those of Citi. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
