Nuvama, 360One Wealth, Anand Rathi Wealth: Bernstein bets on asset managers

Until now, most wealth was self-managed, or managed by unorganised players. This, Bernstein feels, will change as rising return expectations, product complexity will trigger demand for professionals

Global research and broking firm Bernstein has turned bullish on asset / wealth managers – Nuvama, 360One Wealth (outperform rating for both) and Anand Rathi Wealth (Market-Perform rating) as it bets on the growing wealth of Indians.

Wealth management in an emerging market (EM), Bernstein said in a recent report, may appear to be an oxymoron, but the rising wealth of India’s uber-rich (over $2.7 trillion at the last count) provides the perfect pathway for a multi-year secular scale-up opportunity for the organised wealth managers.

Household wealth, according to the Bernstein report, is highly concentrated in India – top 1 per cent households controlling around 60 per cent of the total wealth in India. 

 

Although growth will continue to create opportunities across the pyramid, Bernstein thinks the rich will get richer over time.

Uber-rich Indians

India’s uber-rich – an estimated around 3 million households - hold $2.7 trillion in liquid financial wealth, Bernstein estimates. Until now, most wealth was self-managed, or managed by unorganised players. This, their analysts feel, will change as rising return expectations, product complexity will trigger demand for professional advice going ahead.

“We see specialised wealth managers benefiting, with a long growth runway. We expect specialised wealth managers to expand from $300 billion in assets under management (AUM) to $1.6 trillion over the next decade, implying an over 18 per cent compounded annual growth rate (CAGR),” wrote Manas Agrawal and Himank Sangai of Bernstein in a recent note.

At the bourses, meanwhile, Anand Rathi Wealth and Nuvama Wealth have outperformed the Sensex (up around 6 per cent) thus far in calendar year 2025 (CY25) with a gain of 36 per cent and 12 per cent, respectively. 360 One Wam, however, lost 10 per cent during this period, ACE Equity data shows. 

Wealth distribution in India

At a macro level, the wealth management industry, Bernstein feels, is seeing early movers scale up. This surge, it said, is reminiscent of the advent of private banks in India during the late 1990s - a period that set the stage for one of the most significant episodes of value creation.

“Over the long term, the industry will consolidate, with a handful of dominant players emerging ahead of a long-tail of smaller players. We favor wealth managers with a higher proportion of distribution business, as this segment delivers predictable and sticky growth,” Agrawal and Sangai wrote.

Stock strategy

Among the lot, Nuvama Wealth is Bernstein's top pick (12-month target price Rs 9,790; upside 26 per cent) given the road ahead for its wealth management for high/ultra-high net worth clients, clearing services, and asset management business verticals.  “While near-term headwinds are expected due to ongoing regulatory actions impacting one large client, we remain positive on medium-term growth, expecting around 25 per cent profit growth and 29 per cent return on equity (RoE) beyond a softer FY26,” the note said. 

The recent move to expand beyond top cities and into the large HNI space with acquisitions and a strategic partnership with UBS augurs well for 360One Wealth (12-month target price Rs 1,410; upside 23 per cent), Bernstein said, and expects around 20 per cent pre-tax profit growth, with RoE at nearly 20 per cent by FY28, despite the drag from equity infusion/issuance.

“Anand Rathi Wealth (12-month target price Rs 2,580; downside 2 per cent) demonstrates robust profit growth (26 per cent) and 40 per cent+ ROE, but its reliance on market-linked debentures for over half its revenue raises concerns on risk and valuation. While attractive for clients and distributors, the need for careful hedging means any risk management flaw could impact growth for the distribution business,” Agrawal and Sangai said.