Raamdeo Agarwal on present market traits, new-age shares and earnings: 5 key takeaways

amdeo Agarwal, co-founder and chairman of Motilal Oswal Monetary Companies, in an unique interview with ET Now, spoke on a spread of points from India’s compounding development story to present market traits to alternatives in IT and banking area. Listed here are 5 key takeaways from the Dalal Road veteran on what the market is trying like at the moment and what it has to supply going ahead.

Trying past heavyweights in IT
Ramdeo Agarwal stated the IT sector gives a a lot larger alternative, past the present heavyweights in that area. “The IT story is far larger. You should not have to stay to the present set of these prime huge corporations. They could provide you with a 10-15% index return or one thing like that. However beneath that there will probably be a number of corporations which can attempt to come into the large league,” he stated.

Agarwal stated the Indian IT trade took about 20 years to get the primary $100 billion mark and 8-10 years for the subsequent $100 billion, however the third $100 billion goes to come back in 4 to five years.

Financial institution earnings to greater than double
Agarwal stated the banking revenue pool this yr is at the moment at Rs 2 lakh crore and it might attain Rs 4-5 trillion mark in subsequent 5 years. “In 10 years’ time, the determine could possibly be about Rs 10 lakh crore,” he stated.

Will new-age shares make it huge?
Agarwal stated now that the hype has been busted and sky-high valuations have come down a bit, put up the correction in shares, among the new-age corporations may make it huge sooner or later.

“Round November to December final yr, there was a number of hype round new-age corporations and valuations have been loopy. That isn’t the case anymore with 60-70% correction in some shares. One can say for positive that they will not right additional, however not less than the promoters come to the senses with give attention to fast and huge profitability. So, a few of them will probably be very profitable and among the corporations are very distinctive,” he stated.

This autumn outcomes gained’t be very totally different from Q3
Commenting on the present market traits, Agarwal stated the fourth quarter outcomes is not going to be any totally different from the third quarter. He stated the EPS for Nifty is round Rs 825-830 EPS on a trailing foundation and as soon as the market will get confidence in earnings development, there will probably be important upside.India’s compounding development story
Agarwal says India has one of many longest compounded development tales up to now and that there will probably be subsequent 25 years of compounded future. Agarwal explains: “India is at the moment at 10-11% of nominal GDP development fee and on a base of Rs 270-280 lakh crore GDP, we’re speaking about nearly Rs 30 lakh crore of further GDP this yr. From that you’ve got a ten% compounding yearly.”

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