Bernstein has urged investors to look at Indian wealth management stocks as compelling recovery candidates after a recent market selloff pushed shares lower. The firm argues the declines do not reflect the longer-term fundamentals of the sector and that some names are trading at attractive valuations following the pullback.
The analyst at Bernstein, Manas Agrawal, pointed out that wealth managers suffered larger relative declines than listed asset managers during the market downturn. He highlighted examples including Nuvama, which is down 16% year-to-date, and 360One, which has fallen 7% so far this year, while many publicly traded asset managers have held steady or appreciated.
Agrawal acknowledged that wealth managers typically exhibit more than 1x beta to equity markets - meaning their revenues and assets under management (AUM) tend to move with market swings - but he said that characteristic does not fully explain the extent of the recent selloff. He emphasized that the client base of these firms, largely composed of ultra-high- and high-net-worth individuals, is generally more resilient in terms of flows and behavior than retail investors.
Another stabilizing factor, according to the analyst, is that client assets are allocated across both equity and non-equity asset classes, which can provide a degree of cushioning when equity markets fall. Bernstein also sees a reduction in the earlier perceived risk from intensifying competition for client retention, a concern that had pressured sentiment previously.
"We do not think the larger relative drawdowns are warranted, especially at a time when the perceived risk to growth from competition is getting lower," Agrawal wrote.
On stock ratings, Bernstein lists 360One Wealth and Nuvama Wealth as Outperform and assigns Anand Rathi Wealth a Market-Perform designation. The firm also examined valuations and relative positioning across the trio.
Valuation metrics cited by Agrawal show 360One trading at 27x/23x fiscal 2027/28 consensus earnings following a partial recovery, while Nuvama is trading at 19x/16x on the same fiscal-year basis. Agrawal described 360One as "a cleaner story," noting the firm delivered strong net flow execution in the second and third quarters despite earlier worries about attrition among relationship managers.
For Nuvama, Bernstein said the stock could still generate returns for investors, but patience may be required as the market works through the overhang associated with its majority shareholder PAG - which holds around 55% of the company - and a revenue reset in the clearing business.
Agrawal also cautioned that earnings estimates for both 360One and Nuvama are likely to be revised downward to reflect the fourth-quarter drawdown in markets and the consequent lower starting point for AUM heading into fiscal year 2027 (FY27). Still, he argued that even a hypothetical cut of approximately 10% to FY27/28 earnings to cover the entirety of the Mar-2026 market drawdown would leave valuations appearing attractive.
Bernstein has not yet updated its formal earnings forecasts in response to recent market developments, citing a ceasefire announcement as part of the context for that choice.
Anand Rathi Wealth has shown a different trajectory. The stock has been essentially flat year-to-date and has risen 9% since the onset of the Middle East conflict - a performance Agrawal called "somewhat surprising" given the potential revenue impact from weaker markets.
Overall, Bernstein's note frames recent price moves in wealth management names as overshooting the sector's risk profile, while also acknowledging near-term earnings and AUM uncertainty stemming from the market drawdown. The firm's ratings and valuation comparisons provide its preferred ideas among listed Indian wealth managers.