- Ramdev Agarwal, Chairman, Motilal Oswal Financial Services
- A correction of one thousand to two thousand points can come. If that happened then the market would be better
- The growth story in the IT sector will start now, the sector will be booming for 5 to 10 years
- Digital should not be ignored, this will be the biggest wealth creator in the near future.
The Sensex has fallen from 62 thousand to 55 thousand. This does not mean that the bull run in the Indian market is over. This is a correction that has been waiting for a year and a half. Investors should buy slowly. Ramdev Agarwal, a well-known investor and chairman of Motilal Oswal Financial Services, made the remarks in a conversation with Skand Vivek Dhar of Bhaskar. The main part of the conversation with them.
Question: In one month, the Sensex has dropped from 62,000 to 55,000. Is the bull run over?
A: The bull run is not over yet. Even during the bull run, there is a correction in the market. It has been going well for some time now. The results of the companies were good, foreign investors were constantly investing. 3-4 crore new investors came in the market. As a result, the market continued to rise from April 2020 to October 2021, creating a hype. Now there is a healthy correction, which was much needed.
Question: What should be the strategy of investors in the current market situation?
A: Investors should buy, but not all at once. Shares of a company whose valuation is good should be bought at a time of decline. From here, the market can fall by a thousand-two thousand points more. Then there will be an even better investment opportunity.
Q: In which sector can you buy now?
A: The sectors associated with the growth of the country’s economy will be good for investment. The IT, digital, banking, insurance and capital goods sectors could prove to be good for investment.
Question: FPIs are constantly withdrawing money from Indian markets. How long will this continue?
A: The Indian market has done well in the world, but now it has become expensive. All the international brokerage firms rated the Indian market negative. That is why foreign investors were withdrawing money from here. After this correction, the rating of the Indian market will quickly improve, so that foreign investors will start coming back.
Question: The share price of most IT companies has doubled in the last one and a half years. Why are you bullish on IT in this situation?
A: Leaving aside the last year and a half, the growth of IT companies has stalled. Now the digital movement is starting all over the world. It will benefit Indian IT companies. The real business for IT companies will start now. The recruitments he has made in the last one year will start showing productivity from 2023. The IT sector should see a bigger boom than it did at Y2. This boom will last for five to ten years.
Q: Recently tech based startups like Paytm, Zomato, Nayaka were listed. What is your suggestion for investing in it?
Ans: We have mentioned two categories of Atom and Bits in our Wealth Creation Report. Atoms are traditional companies, while Bits are digital companies. A big change is taking place in the business world in the form of digital. We must not ignore it. It will be the biggest wealth creator in the near future. However, hype should be avoided here as well. Most startups are listed at over-value. There will still be a correction. That is the time to invest.
Question: The PE ratio is used to measure the valuation of a stock, but recently many stocks have crossed the PE 900. So has PE been of any importance?
A: Even six-seven years ago, there was a huge gap in PE. Currently this gap has widened, but PE is still the best way to find out if a stock is expensive. However, one should not invest just by looking at PE. Along with this growth, ROI, dividend etc. should also be assessed.