Latest news with #RaamdeoAgrawal
Economic Times
14 hours ago
- Business
- Economic Times
Patience is key in markets as global uncertainties test new investors: Raamdeo Agrawal
Investors may face short-term stagnation, but enduring patience often leads to stronger long-term returns—especially critical for newcomers navigating today's uncertain market. Synopsis Market veterans urge patience amid current dull phases and geopolitical tensions. While returns may dip temporarily, long-term gains often follow extended periods of low performance. New investors should embrace this cycle with discipline and perspective. I was talking to some people they were saying that market is dull. What do we do? So, I said expect little lower return and get ready for a bigger return. Longer you wait for a low return, higher will be the return on the back ended. So, this is a time for a little patience, says Raamdeo Agrawal, co-founder of Motilal Oswal Group. ADVERTISEMENT Raamdeo Agrawal: Coming back to your question, markets have been actually very resilient if you look at a very long term, 10, 15, 17 years. It has been very predictable market and in last 16 years if you see, we have seen…, 16 years means we are talking about something like post GFC which is about 2008-09. So, after that only Covid has been one of the big breakdown, otherwise market has been very-very nice and scaling up. And from 2020 post Covid, we are seeing virtual boom from 8,000-9,000 post covid correction to now 24,000-25,000, so 3x in five years, so it is a very sustained rise and it is very resilient. I mean, good thing is that not only it is rising, the corrections are very-very shallow and so that is giving the confidence. Even it has given a lot more confidence to retail investors and so, yes, journey has been very good. Raamdeo Agrawal: So, I was talking to some people they were saying that market is dull. What do we do? So, I said expect little lower return and get ready for a bigger return. Longer you wait for a low return, higher will be the return on the back ended. So, this is a time for a little patience. Today market is good, but generally all these geopolitical challenges, the patience is a lot more required whenever the external environment becomes hostile. So, right now we are going through slightly turbulent environment and patience is the key one should… I mean, lot of people have come new in the system, almost like 60-70% people are less than five years into the market. So, they would have not…, their patience will be tested for the first time, so they should be ready to provide that necessary patience, no return kind of a zone for some time and then journey again starts. So, my sincere request to all the new investors would be that they should be ready to provide that patience which is the biggest fertiliser for long-term investing. ADVERTISEMENT Raamdeo Agrawal: No, there has been…, a downdraft for the gold must be low. Of course, gold has done much better than I ever thought it will do. One is that there is no outperformance to further gold performance. If gold has done 15% or index has done 15%, I think I must have done at least 20%, so that 5% is not possible in gold. It is only possible in equities and I mean, some of the guys might have done 25%, 30% also, that is not possible in gold unless you leverage and those kind of things. So, yes, I mean, gold has outperformed my own wildest expectation and it has emerged globally also as a very important bucket of value, so the people who believe in gold, of course, it is good news to them. And right now, it looks very, what do you call, bullish, but I would not put anything onto the gold. I am pretty comfortable. One of the things which Mr Buffett said is do what you understand. So, I understand only equities. So, I am pretty good at staying with equities. ADVERTISEMENT Raamdeo Agrawal: No, I still think capital market remains a big opportunity because it is asset light and it is very scalable and the firms, particularly is the opportunity size is one. Second is the scalability within, what do you call, opportunity itself, like if you look at the global asset management companies, now they do not talk in billions, they only talk in trillions. I mean, like there are $8 trillion, $10 trillion kind of a single asset management company. So, those kind of… As our AUM grows, we will also see that 10-15% of the total AUM would be with one AMC, like in India out of 40 lakhs equities, SBI must be having almost like 7-8 lakh crores. So, those kind of consolidated positions will be there on a much more enlarged asset base. When asset base goes from 40 lakh crores to 400 lakh crores, these giants will have their due share in the larger pie also. So that kind of a capital market… and capital market is very, I would say, at least to me it looks like very smoothly compounding and scaling as a GDP of the country grows and the entire system remains intact. So, the capital market opportunity still is a pretty large opportunity and now markets have valued it also somewhat. ADVERTISEMENT When we talked about three years back, valuations were very cheap. Now, people are realising that and it is showing up in the valuation. So, less attractive opportunity than what it was three years back, but nevertheless longer term that opportunity still stays pretty intact. But going to other segments, if the oil price stabilises about $65 or $60, all the OMCs which are there at current, currently available at literally one book or one-and-a-half book, 10 times, 12 times for their size of the businesses that seems to be kind of a great opportunity and it is very early trend. But let us see, I mean the government also has to be supporting in terms of policy making but that looks to be a big trend out here. Raamdeo Agrawal: So, like the real estate looks to be…, real estate, defence, energy transitions, capital market, I mean these are few themes which are coming immediately to my mind, they will grow at more like 20%, 22%, 25%. Even banking, banking on the whole, the kind of policy we are seeing, the regulator wants higher growth, credit growth rate. So, if the 13-14%, if they go back to the trend, credit growth rate, in that case mid-sized banks, well-managed banks they will grow at about 18-20% or more than that. So, yes, I mean, there are whole lot of sectors who will definitely grow. I mean, almost like one-and-a-half times of nominal GDP growth rates. ADVERTISEMENT Raamdeo Agrawal: I mean, you have to be selective what companies you buy because it is a very-very large sector and the companies have their own limitation in terms of execution. Every city has two-three very large realty companies. But then if you look at the whole country, as you go from current $4 trillion GDP to $8 trillion or $20 trillion, the biggest game in town is going to be the real estate company. Anybody makes money anywhere in stock market or anywhere, first thing they go is and splurge in buying a better house, good house and better house. If somebody has two bedroom, he will go for three-bedroom, they will go for better locality. So, real wealth effect of stock market and of the broader economy will be reflected in realty boom and that is what we are witnessing and I mean, it is just about three-four years old kind of thing, till about Covid things were absolutely in dumps. Of course, they have come back from there and a lot of companies are listed also and a lot of companies are going to come up, but in this space we will find some unknown tier III companies or tier II companies or small companies making big splash in next 5-10 years. Raamdeo Agrawal: Yes, so that I forgot to tell, but that is one thing which is going to be across, I mean, there is going to be so many companies from the digital side. The way US market is looking today that 8-10 digital companies are kind of a dominating the entire index movement or corporate profitability movement, those movements will also come maybe after five-seven years in terms of significance. Raamdeo Agrawal: I mean, that is company wise, you have to go very company-wise, listen to the story, eat, drink, and spend time with them and understand their story. At that time you are able to figure out, at least the way I go about doing it is spend a full day with the company, at the end of the day you will be able to figure out whether it is in the price or you are way above the…, I mean, underlying value is more than the price or price is more than the value that you will be able to figure out by spending full day with the company. Raamdeo Agrawal: I am not too sure that world will go without IT services companies like Infosys, TCS, and all. But AI computing or what AI role…, I mean role of services companies will be changing for sure and they have been changing right throughout, from a complete body shopping in 90s to project implementation and now very large complex projects and now the new angle which has come up is the AI computing. So, I mean how relevant they will be in this new…, and they will be relevant, I do not have any doubts. The issue is, are their role going to go up or they will go through this stagnancy process or some kind of a contraction also. Because it budgets, I mean in my own company IT budgets are not going down, it spend is continuing and it is always short, your projects are not getting completed in time. So, it is not that just AI is coming and eating away all the services, no, it is not happening in real life. Yes, there is some exciting development about the AI, some of the things can be done faster, but I am not the right person to pass a judgment, but I do not think it is down and out kind of situation, no. (You can now subscribe to our ETMarkets WhatsApp channel) Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Cyient shares fall over 9% after Q4 profit declines, core business underperforms Cyient shares fall over 9% after Q4 profit declines, core business underperforms L&T Technology Services shares slide 7% after Q4 profit dips L&T Technology Services shares slide 7% after Q4 profit dips Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? 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Time of India
14 hours ago
- Business
- Time of India
Patience is key in markets as global uncertainties test new investors: Raamdeo Agrawal
I was talking to some people they were saying that market is dull. What do we do? So, I said expect little lower return and get ready for a bigger return. Longer you wait for a low return, higher will be the return on the back ended. So, this is a time for a little patience, says Raamdeo Agrawal, co-founder of Motilal Oswal Group. ET Now: So, firstly wanted to have your take on how you have seen the markets transitioning throughout these many years and from here on how do you see the market going ahead, your first thoughts on that. Raamdeo Agrawal: Coming back to your question, markets have been actually very resilient if you look at a very long term, 10, 15, 17 years. It has been very predictable market and in last 16 years if you see, we have seen…, 16 years means we are talking about something like post GFC which is about 2008-09. So, after that only Covid has been one of the big breakdown, otherwise market has been very-very nice and scaling up. And from 2020 post Covid, we are seeing virtual boom from 8,000-9,000 post covid correction to now 24,000-25,000, so 3x in five years, so it is a very sustained rise and it is very resilient. I mean, good thing is that not only it is rising, the corrections are very-very shallow and so that is giving the confidence. Even it has given a lot more confidence to retail investors and so, yes, journey has been very good. Raamdeo Agrawal: So, I was talking to some people they were saying that market is dull. What do we do? So, I said expect little lower return and get ready for a bigger return. Longer you wait for a low return, higher will be the return on the back ended. So, this is a time for a little patience. Today market is good, but generally all these geopolitical challenges, the patience is a lot more required whenever the external environment becomes hostile. So, right now we are going through slightly turbulent environment and patience is the key one should… I mean, lot of people have come new in the system, almost like 60-70% people are less than five years into the market. So, they would have not…, their patience will be tested for the first time, so they should be ready to provide that necessary patience, no return kind of a zone for some time and then journey again starts. So, my sincere request to all the new investors would be that they should be ready to provide that patience which is the biggest fertiliser for long-term investing. Live Events ET Now: In last 15 years if I look at ballpark, like we say in Hindi mota-moti gold and equity markets have given almost parallel returns. Now, with gold you have not done any hard work, you always had advantage of liquidity. With equity markets in last 15 years you have taken big knocks of volatility in covid and then in 2013-14. So, if gold has given returns which are almost equivalent to equities, what does that tell you that which asset class will outperform going forward because gold has given you good returns without any stress. Equity has given you all kind of stress and has not given you great returns in 15 years. Raamdeo Agrawal: No, there has been…, a downdraft for the gold must be low. Of course, gold has done much better than I ever thought it will do. One is that there is no outperformance to further gold performance. If gold has done 15% or index has done 15%, I think I must have done at least 20%, so that 5% is not possible in gold. It is only possible in equities and I mean, some of the guys might have done 25%, 30% also, that is not possible in gold unless you leverage and those kind of things. So, yes, I mean, gold has outperformed my own wildest expectation and it has emerged globally also as a very important bucket of value, so the people who believe in gold, of course, it is good news to them. And right now, it looks very, what do you call, bullish, but I would not put anything onto the gold. I am pretty comfortable. One of the things which Mr Buffett said is do what you understand. So, I understand only equities. So, I am pretty good at staying with equities. ET Now: But I was telling someone today that when I met Raamdeo ji three years back on Diwali, he said capital markets is going to be that one structural story and I was just admiring the way that you actually pick up big trends in the market. While capital markets theme is not going anywhere in a hurry hopefully so, but what are the other big trends that you foresee now emerging in the markets? Raamdeo Agrawal: No, I still think capital market remains a big opportunity because it is asset light and it is very scalable and the firms, particularly is the opportunity size is one. Second is the scalability within, what do you call, opportunity itself, like if you look at the global asset management companies, now they do not talk in billions, they only talk in trillions. I mean, like there are $8 trillion, $10 trillion kind of a single asset management company. So, those kind of… As our AUM grows, we will also see that 10-15% of the total AUM would be with one AMC, like in India out of 40 lakhs equities, SBI must be having almost like 7-8 lakh crores. So, those kind of consolidated positions will be there on a much more enlarged asset base. When asset base goes from 40 lakh crores to 400 lakh crores, these giants will have their due share in the larger pie also. So that kind of a capital market… and capital market is very, I would say, at least to me it looks like very smoothly compounding and scaling as a GDP of the country grows and the entire system remains intact. So, the capital market opportunity still is a pretty large opportunity and now markets have valued it also somewhat. When we talked about three years back, valuations were very cheap. Now, people are realising that and it is showing up in the valuation. So, less attractive opportunity than what it was three years back, but nevertheless longer term that opportunity still stays pretty intact. But going to other segments, if the oil price stabilises about $65 or $60, all the OMCs which are there at current, currently available at literally one book or one-and-a-half book, 10 times, 12 times for their size of the businesses that seems to be kind of a great opportunity and it is very early trend. But let us see, I mean the government also has to be supporting in terms of policy making but that looks to be a big trend out here. ET Now: So, I am using the nominal GDP as the benchmark here, 11% to 12%. For next three years which are the businesses because investing like you always say is buying a good business. Which are the businesses which will grow faster than the nominal GDP? Which are the businesses which will grow in and around the nominal GDP? And which are the businesses, themes, or sectors which will grow in single digit? Raamdeo Agrawal: So, like the real estate looks to be…, real estate, defence, energy transitions, capital market, I mean these are few themes which are coming immediately to my mind, they will grow at more like 20%, 22%, 25%. Even banking, banking on the whole, the kind of policy we are seeing, the regulator wants higher growth, credit growth rate. So, if the 13-14%, if they go back to the trend, credit growth rate, in that case mid-sized banks, well-managed banks they will grow at about 18-20% or more than that. So, yes, I mean, there are whole lot of sectors who will definitely grow. I mean, almost like one-and-a-half times of nominal GDP growth rates. ET Now: You have been extremely bullish on real estate, which you have always maintained that it is also a structural story. A lot of the positive is already in the price. The real estate sector is a well discovered sector now. But do you think with RBI's push, with all that RBI is doing with regards to norms now and infra lending, etc, as well, this sector is here to stay and there is still money to be made? Raamdeo Agrawal: I mean, you have to be selective what companies you buy because it is a very-very large sector and the companies have their own limitation in terms of execution. Every city has two-three very large realty companies. But then if you look at the whole country, as you go from current $4 trillion GDP to $8 trillion or $20 trillion, the biggest game in town is going to be the real estate company. Anybody makes money anywhere in stock market or anywhere, first thing they go is and splurge in buying a better house, good house and better house. If somebody has two bedroom, he will go for three-bedroom, they will go for better locality. So, real wealth effect of stock market and of the broader economy will be reflected in realty boom and that is what we are witnessing and I mean, it is just about three-four years old kind of thing, till about Covid things were absolutely in dumps. Of course, they have come back from there and a lot of companies are listed also and a lot of companies are going to come up, but in this space we will find some unknown tier III companies or tier II companies or small companies making big splash in next 5-10 years. ET Now: You have been a big votary of these high digit, high growth businesses, especially the digital businesses. Raamdeo Agrawal: Yes, so that I forgot to tell, but that is one thing which is going to be across, I mean, there is going to be so many companies from the digital side. The way US market is looking today that 8-10 digital companies are kind of a dominating the entire index movement or corporate profitability movement, those movements will also come maybe after five-seven years in terms of significance. ET Now: …say that you need to figure out what is in the price, whether it is good news or bad news, whether it is earnings or whether it is compounding. So as we look into the future and if one has to look at next 12 to 18 months from a market standpoint, what is in the price and what is not in the price. Raamdeo Agrawal: I mean, that is company wise, you have to go very company-wise, listen to the story, eat, drink, and spend time with them and understand their story. At that time you are able to figure out, at least the way I go about doing it is spend a full day with the company, at the end of the day you will be able to figure out whether it is in the price or you are way above the…, I mean, underlying value is more than the price or price is more than the value that you will be able to figure out by spending full day with the company. ET Now: Talk about a theme where question marks have been raised about the viability and the future existence and that is a good old IT services. Massive wealth creators but from given what is happening in AI, the maturity curve, the demand, do you think these stocks will continue to underperform and one should not call them as contra or value buyers at all. Raamdeo Agrawal: I am not too sure that world will go without IT services companies like Infosys, TCS, and all. But AI computing or what AI role…, I mean role of services companies will be changing for sure and they have been changing right throughout, from a complete body shopping in 90s to project implementation and now very large complex projects and now the new angle which has come up is the AI computing. So, I mean how relevant they will be in this new…, and they will be relevant, I do not have any doubts. The issue is, are their role going to go up or they will go through this stagnancy process or some kind of a contraction also. Because it budgets, I mean in my own company IT budgets are not going down, it spend is continuing and it is always short, your projects are not getting completed in time. So, it is not that just AI is coming and eating away all the services, no, it is not happening in real life. Yes, there is some exciting development about the AI, some of the things can be done faster, but I am not the right person to pass a judgment, but I do not think it is down and out kind of situation, no. ETMarkets WhatsApp channel )
Time of India
5 days ago
- Business
- Time of India
IndiaMART InterMESH shares in focus on declaring Rs 50 dividend
Shares of IndiaMART InterMESH are likely to be in focus on Tuesday, June 17, after the company proposed a substantial total dividend of Rs 50 per equity share for the fiscal year 2024-25 to its shareholders. The said payout includes a final dividend of Rs 30 per share and a special dividend of Rs 20 per share. 'The following items as stated in the Notice of the AGM were considered at the AGM: To declare a final dividend of Rs. 30/- per equity share for FY 2024-25 and a special dividend of Rs. 20/- per equity share aggregating to total dividend of Rs. 50/- per equity share,' the company said in an exchange filing. Over the last 12 months, Trendlyne data suggests that IndiaMART has announced a total equity dividend of Rs 50 per share. Based on a market price of Rs 2,490.50, this translates to a dividend yield of 2.01%. IndiaMART InterMESH technical placement The shares of IndiaMART InterMESH are currently placed well above all their short-, medium-, and long-term exponential moving averages (EMAs), i.e., 10, 20, 50, 100, and 200 DEMA. On the RSI, the stock is placed near the 66.6 mark, which is a mid-range level. An RSI below 30 is considered oversold, and above 70 is considered overbought. Also read: Raamdeo Agrawal predicts 3 lakh Sensex target, multibagger strategy and 4 investment themes IndiaMart InterMESH share price history Over the past year, IndiaMART InterMESH Ltd.'s stock has declined by 3.39%. However, the stock has shown positive momentum in recent periods, gaining 8.95% year-to-date, 4.79% over the last six months, 27.28% in the past three months, and 5.97% over the last 1 month. On Monday, the shares of IndiaMart closed nearly 1% higher at Rs 2,489.95 on the BSE. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
09-06-2025
- Business
- Time of India
Bajaj Finance, other NBFC stocks outperform bank stocks after RBI bazooka. Should you still buy?
With Bajaj Finance shares rallying nearly 10% in two days, NBFC stocks have become the Street's favourite after the RBI front-loaded easing with a 50 bps repo rate cut and liquidity injection via a 100 bps CRR cut, a move that many are calling a monetary bazooka. While both banks and NBFCs stand to benefit from the RBI's front-loaded easing, the benefit is disproportionately higher for NBFCs, owing to their fixed-rate loan books and bulk borrowings. "We prefer NBFCs and advise investors to sell banks into any sentiment-driven rally," said Seshadri Sen of Emkay Global , citing that the margin impact from front-ended rate cuts is still underappreciated by the market. During Monday's trade, Bajaj Finance jumped over 4%, building on its 5% rally on Friday. The momentum spread across the space — Muthoot Finance , Cholamandalam Investment , PFC, and REC gained between 3 and 4%. The broader Nifty Bank index also touched a fresh high above 57,000, led by Kotak Bank and AU Small Finance Bank, both up around 3%. According to Emkay Global , the RBI move is a clear positive for NBFCs, particularly those with high exposure to bank borrowings and a larger fixed-rate loan book (like gold and vehicle financiers). These NBFCs stand to gain meaningfully from lower cost of funds and improved NIMs (net interest margins) in H2FY26 and ahead. 'The overall actions and message from RBI are supportive of NBFCs and signal that the regulator is satisfied with the system's stability and supports their growth. Encouragingly, the RBI has noted that stress in unsecured personal loans and credit cards has eased, which helps clear regulatory overhangs for these segments. With the cost of funding coming down and stress easing in a few segments, the NBFCs are set for risk-calibrated profitable growth, in our view,' Emkay said. Also read | Raamdeo Agrawal reveals his simple 2-step formula for finding multibagger stocks Winners and watchlists NBFCs like Shriram Finance, Aditya Birla Capital , LIC Housing Finance, Aadhar Housing, and Five Star Business Finance are among JM Financial's top picks. 'For NBFC/mid banks having a higher share of fixed rate loans (like SHFL/MMFS etc.), positive impact on NIMs is contingent upon yield trajectory despite benefits on the cost of funding side. Due to loan mix shifting towards secured loan segments and pricing pressure in secured loans driven by elevated competition, is leading to pressure on yield,' JM Financial said. For banks, the brokerage recommends Axis, ICICI Bank , SBI , and DCB, while flagging caution on broader sector valuations. As per their estimates, 100 bps repo rate cut could reduce NIMs by 20–40 bps, though the CRR cut could cushion 20–30% of that impact. "NBFCs benefit more in a significant easing cycle than banks," said market expert Sandip Sabharwal, adding that their dependence on bulk borrowing makes rate transmission more immediate. Also read | RBI's Rs 2.5 lakh crore masterstroke! Why bank stocks are smiling despite NIM pain What about valuations? The rally in NBFC stocks hasn't come out of the blue. Many of them have already outperformed the broader market over the past six months, prompting analysts to issue a word of caution. 'While falling interest rates are positive for NBFCs, concerns over muted asset growth and credit quality continue to weigh on sentiment. Much of the regulatory support and stable outlook are already priced into the NBFC stocks, which have outperformed the broader market over the past six months,' Emkay noted. They prefer Aditya Birla Capital for its NIM expansion potential, REC for strong RoE and yield, and Shriram Housing Finance for its risk-adjusted valuation. IIFL, while acknowledging benefits from front-loaded rate cuts, expects less than 1% earnings upgrade for fixed-rate NBFCs. It prefers Cholamandalam, Five Star, and PNB Housing Finance as medium-term bets, citing better pricing power and balanced loan books. The brokerage also pointed to regulatory tailwinds — higher LTV on small-ticket gold loans, relaxation on provisioning, and valuation tweaks — all of which benefit NBFCs more than banks. The RBI's aggressive easing cycle may have created a near-term windfall for NBFCs, but investors now need to be highly selective. Fixed-rate lenders, bulk borrowers, and those with clean books and pricing power are best placed to ride this tailwind.
Economic Times
09-06-2025
- Business
- Economic Times
Raamdeo Agrawal reveals his simple 2-step formula for finding multibagger stocks
In a market teeming with noise, legendary value investor and Motilal Oswal Financial Services co-founder Raamdeo Agrawal believes the formula for spotting the next multibagger is surprisingly simple but understood by very few. ADVERTISEMENT 'No one really understands compounding,' Agrawal said in a candid conversation with ET Markets. 'Even in an IIT class, maybe just one person gets it.' The power of compounding, he said, is rarely appreciated because 'you cannot see the future.' The billionaire investor broke down his multibagger framework into two key factors: early-stage tailwinds and good management. 'When there is a combination of good management and tailwind, and you are in the early stage of that tailwind, you are sitting on a multibagger formula,' he said. Agrawal emphasized that compounding remains a mystery even to those trained in the best institutions. The reason? It deals with the future — something abstract and often uncomfortable for most people to internalize. 'If I understand compounding and others don't, I'm like a one-eyed king among the blind,' he quipped. Also read | Sensex will hit 1.5 lakh by 2030 & 3 lakh by 2035! Raamdeo Agrawal makes big prediction To illustrate its power, he offered simple math: A 25% annual return multiplies wealth tenfold in ten years. At 35%, it's 20 times. At 45%, the return becomes 40x. That's the wealth creation potential he believes more investors need to grasp — not just theoretically, but with conviction. ADVERTISEMENT Agrawal also addressed how to value fast-growing businesses. If a stock can grow earnings 40x over a decade, it makes sense to pay a premium upfront — even a P/E ratio of 100, he said. ADVERTISEMENT 'You start by looking at the index valuation,' he explained. 'If the market gives 15% return at 20 P/E, then you must reward companies with higher growth prospects with higher multiples.'Valuation, according to him, is always relative and dynamic. 'There's no absolute value in the world. It's like real estate. You want to know the value of a new building? You look at the old one next door.' Market prices, he added, get reset daily, sometimes hourly, based on fresh information and sentiment. ADVERTISEMENT Asked about the frothy valuations of certain smallcaps in the recent bull market, Agrawal was unequivocal: 'They were all wrong, and they will correct.' Valuations may vary among investors, he admitted, but not by absurd degrees. 'If I say the price should be ₹300, my friend may say ₹350–400. But if someone says ₹4,000, then either you come to my place for tea, or I'll come to yours. We need to reconcile.'This, he explained, is where market discipline eventually kicks in. Retail exuberance can distort short-term prices, but long-term fundamentals prevail. ADVERTISEMENT India's retail revolution has changed the character of its stock market. From just 2 crore demat accounts in 2020, the figure has exploded to 20 crore today. But Agrawal noted that beneath this surface lies a sharp divide.'The real control is still with the one crore serious investors,' he said. 'They own 90% of the market. The remaining 90% of demat holders own just 10%. So while the new entrants may create volatility, they don't control direction in the long run.'Still, he acknowledged that this influx has made the market more unpredictable in the short term. 'You're now dealing with a disproportionately large number of misinformed or ill-informed traders.'Agrawal believes all valuation metrics are valid — depending on the investor. 'There are four or five moving parts: sales growth, profit growth, ROE. These are core. Then valuation depends on your perspective.'For a pension fund from Canada, a 5% dollar return may be sufficient. For an Indian investor, the bar is higher — maybe 18%. 'This market is made up of everyone,' he said, adding that one yardstick won't work for human tendency to group companies — like "cement stocks" or "banking stocks" — may help simplify investing, but Agrawal warned that each company is unique. 'You have to understand that uniqueness to value it. Every cement company is different. Every bank is different.'This depth of understanding is often what separates successful investors from the sees the current market as being held up by consistent domestic inflows and a relatively benign macro backdrop. 'The Pakistan tension is gone. Oil at $60–70 is fantastic for India. It changes our trade balance and strengthens the rupee,' he also noted the mean reversion underway. 'Last year, the index rose just 7–8% while portfolios were up 25–30%. I had warned of reversion to mean — and it's playing out now.'The biggest takeaway? Don't try to time the market every day. Instead, look for businesses with early-stage tailwinds and strong leadership — then stay invested.'The real money is made by holding long term,' Agrawal said. 'If you want a multibagger, look for the tailwind before it becomes obvious.' (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
