Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

Nuvama Wealth Management / Equity Bottom-Up

<ul>
<li>Nuvama's Q1FY25 results were yet again stellar with 60% YoY growth in revenues. The excess growth came from the Capital Markets segment where the activity has been upbeat. </li>
<li>The Wealth Management and Asset Management segments, which are core to the business, continued to post secular growth in the range of 18-25% YoY.</li>
<li>For the first-time ever, <a href="https://www.smartkarma.com/entities/nuvama-wealth-management-ltd" target="_blank" data-smartkarma-citation="entities:40316:1" rel="noopener">Nuvama Wealth Management ("Nuvama")</a> also declared dividend. Given the capital light nature of the business, it indicates prudent capital allocation.</li>
</ul>


Nuvama's Q1FY25 results were yet again stellar with 60% YoY growth in revenues. The excess growth came from the Capital Markets segment where the activity has been upbeat. 
The Wealth Management and Asset Management segments, which are core to the business, continued to post secular growth in the range of 18-25% YoY.
For the first-time ever, Nuvama Wealth Management ("Nuvama") also declared dividend. Given the capital light nature of the business, it indicates prudent capital allocation.


Nuvama: Continues to Post Robust Performance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nuvama-wealth-management-ltd" target="_blank" data-smartkarma-citation="entities:40316:1" rel="noopener">Nuvama Wealth Management ("Nuvama")</a>  continues to report strong growth with Q4FY24 revenue at INR 596cr, a growth of 35% YoY. Q4FY24 PAT grew 57% YoY to reach INR 181cr. </li>
<li>Overall, FY24 revenue and PAT ended strong at INR 2063cr (YoY growth of 31%) and INR 597cr (YoY growth of 62%), respectively.</li>
<li>FY24 growth was led by the capital markets (revenue grew 64% YoY) segment, aided by favorable cycle and market-share gains. Wealth and asset management segments are also scaling up well.</li>
</ul>



Nuvama Wealth Management ("Nuvama")  continues to report strong growth with Q4FY24 revenue at INR 596cr, a growth of 35% YoY. Q4FY24 PAT grew 57% YoY to reach INR 181cr. 
Overall, FY24 revenue and PAT ended strong at INR 2063cr (YoY growth of 31%) and INR 597cr (YoY growth of 62%), respectively.
FY24 growth was led by the capital markets (revenue grew 64% YoY) segment, aided by favorable cycle and market-share gains. Wealth and asset management segments are also scaling up well.


Edelweiss Financial Services / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/edelweiss-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:15015:1" rel="noopener">Edelweiss</a> reported a strong Q4FY24 led by robust performance across businesses. The asset management business continues to be the lead performer. Insurance businesses are also growing at an industry-leading pace.</li>
<li>Most notably, the credit business seems to be gaining momentum now, led by co-lending. MSME co-lending disbursements tripled while housing finance (HFC) co-lending disbursements doubled in FY24. </li>
<li>To unlock value and reduce debt at the corporate level, Edelweiss is planning a minority stake sale in the Alternative Asset Management business.</li>
</ul>



Edelweiss reported a strong Q4FY24 led by robust performance across businesses. The asset management business continues to be the lead performer. Insurance businesses are also growing at an industry-leading pace.
Most notably, the credit business seems to be gaining momentum now, led by co-lending. MSME co-lending disbursements tripled while housing finance (HFC) co-lending disbursements doubled in FY24. 
To unlock value and reduce debt at the corporate level, Edelweiss is planning a minority stake sale in the Alternative Asset Management business.


Edelweiss: Co-Lending Led Credit Business Is Now Gaining Momentum

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nuvama-wealth-management-ltd" target="_blank" data-smartkarma-citation="entities:40316:1" rel="noopener">Nuvama Wealth Management ("Nuvama")</a> has been seeing strong growth across all its businesses. Wealth management business is scaling up well. Capital markets business continues to benefit from the upbeat cycle.</li>
<li>The asset management business is in its infancy but is scaling up well. Nuvama launched a new real estate fund via a 50:50 JV with Cushman &amp; Wakefield.</li>
<li>Given wealth management is still nascent in India; the growth potential is huge for Nuvama. At the current valuation, an investment in Nuvama has potential to more than triple.</li>
</ul>



Nuvama Wealth Management ("Nuvama") has been seeing strong growth across all its businesses. Wealth management business is scaling up well. Capital markets business continues to benefit from the upbeat cycle.
The asset management business is in its infancy but is scaling up well. Nuvama launched a new real estate fund via a 50:50 JV with Cushman &amp; Wakefield.
Given wealth management is still nascent in India; the growth potential is huge for Nuvama. At the current valuation, an investment in Nuvama has potential to more than triple.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 11 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.</li>
<li>Some stocks were added to global indices last month while some could be added in February. There are potential index implications for the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a> and <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a> too.</li>
<li>The upward migrations have continued to outperform the downward migrations. The largest recent outperformance has come from stocks expected to move from the Mid Cap to the Large Cap segment.</li>
</ul>


We see 8 stocks moving from MidCap to LargeCap, 8 stocks moving from LargeCap to MidCap, 11 stocks from SmallCap to MidCap, and 14 stocks from MidCap to SmallCap.
Some stocks were added to global indices last month while some could be added in February. There are potential index implications for the NIFTY Index and Nifty Next 50 Index too.
The upward migrations have continued to outperform the downward migrations. The largest recent outperformance has come from stocks expected to move from the Mid Cap to the Large Cap segment.


AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming

India

Nuvama Wealth Management Limited is an Indian multinational wealth management company offering services in wealth management, asset management, asset servicing, and capital markets, catering to affluent, HNI, and UHNI clients. The company provides solutions across various asset classes including equities, fixed income, mutual funds, and alternative investments. Headquartered in Mumbai, India, it was established in 1993.

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Nuvama Wealth Management (NUVAMA IN)

Nuvama: Continues to Post Robust Performance

Nuvama continues to report exceptional performance led by favorable cycle in the Capital Markets segment as well as robust secular growth in its...

Ankit Agrawal, CFA

Nuvama: Continues to Deliver Strong

Nuvama has had a stellar FY24. Even adjusted for favorable cycle in the Capital Markets business, Nuvama is on track to deliver 20-25% growth in...

Ankit Agrawal, CFA

Edelweiss: Co-Lending Led Credit Business Is Now Gaining Momentum

Edelweiss' credit business is now gaining good momentum led by the co-lending model. Its asset management and insurance businesses continue to grow...

Ankit Agrawal, CFA

Nuvama: Stellar Growth Continues

The wealth management industry is in its infancy in India and presents a long runway for growth. Nuvama has established a strong synergistic...

Ankit Agrawal, CFA

AMFI Stock Reclassification Preview (Dec 2023): MidCap to LargeCap Migrations Outperforming

We see 41 stocks migrating between different market cap segments in Jan. A lot of stocks will have passive flows from NIFTY, NIFTYJR and global...

Brian Freitas

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