Also, if you go further ahead in slides, you can see Capital Markets business has PBT of 231 Cr out of 348 Cr of total PBT which means 66% of total PBT is highly cyclical. Add to this there are 20-30% cyclical elements in Nuvama Wealth, Nuvama Private and asset management business as well which are growing good in these good times and can moderate or de grow in bad times, so 70%+ PBT would be cyclical for Nuvama. This explains the constrained earnings multiple despite overall scorching growth.
On similar point raised by one analyst, management did say that they are doing upfront investments in wealth and asset businesses on RM side specifically and there is lag between revenue and investments in these businesses. The RM productivity can increase significantly in 2-3 years which would bring the cost to income down and blended cost to income target is 60% in 2-3 years. This would help offset some of the cyclicality in the business.
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