homemarket NewsCiti expects shares of this wealth management firm to rise another 30% over the next 12 months
Citi expects shares of this wealth management firm to rise another 30% over the next 12 months
Citi initiated coverage on Nuvama Wealth Management with a "buy" rating and a price target of ₹4,110 per share, implying a potential upside of 29% from Friday’s close.
Nuvama Wealth Management Ltd shares soared as much as 11% to hit a 52-week high on Monday after brokerage firm Citi initiated coverage on the stock with a buy rating. However, the stock gave up majority of those gains by the first half of the day.
Citi initiated coverage on Nuvama Wealth Management with a "buy" rating and a price target of ₹4,110 per share, implying a potential upside of 29% from Friday’s close.
Shares of Nuvama surged as much as 12% in early trading before cooling off.
Citi, in a report, mentioned that Nuvama positions it in a sweet spot to leverage the growing formalisation of managed wealth in India.
The brokerage said that the capital markets business has multiple synergies with wealth, even if it poses risks such as volatility in earnings.
Citi called Nuvama wealth an alternate-focused asset management company with a strong product pipeline along with multiple distributor tie-ups which is scaling up.
The brokerage, however, said that rising competitive pressure in mid-market wealth and earnings volatility in capital markets pose downside risks to the company.
Nuvama Wealth and Investment Ltd (formerly Edelweiss Broking Ltd) is a technology-driven securities company in India. The company offers financial services such as broking services, depository services, distribution of financial products, short-term funding for employee stock option schemes and margin trading facility.
Nuvama reported a 29% growth in revenues to ₹492 crore in the July-September quarter compared to ₹382 crore in the year-ago period driven by wealth asset management segments as capital markets witnessed a strong performance in the period.
Shares of Nuvama Wealth are trading 3.9% higher at 3,300. The stock began trading in September and is up 26% since then.
(Edited by : Hormaz Fatakia)
First Published: Dec 4, 2023 12:42 PM IST
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