ET Now: What are you buying on the muhurat day?
Raamdeo Agrawal: I have still not gone to the trading floor. I will definitely be doing something, but I was just wondering what to buy in the sense that there is so much of excitement in the market now. Certainly in the last 2-3 months, the mood has changed so much that it looks that we are in for a good time. So I have little money left. I will go and buy the same stocks what I have in our portfolio. So that is it what I am going to do.
ET Now: So would it be SBI BSE -0.85 % , Central Bank BSE 1.48 % as well as Hero MotoCorp BSE -0.36 % again or are there newer names that you would want to punch in this Diwali?
Raamdeo Agrawal: Earlier we also had talked about Cairn India . They did not do much this year, but with the weaker rupee , this stock still looks to be good. They might get permission to produce more. So at 5-6 PE multiple, Cairn India BSE 0.27 % looks good. We are looking at MCX Financial Technologies BSE 1.79 % kind of stuff. We also bought some Divi’s. So these are the stocks I will typically add a little more. I hope they do well in the next one year.
ET Now: In the last one year, which is in between Diwali, the Indian markets are up by 10%. Do you think the gains for Samvat 2069 could be higher than 2068?
Raamdeo Agrawal: Right now the mood is something like that. I am not good at predicting the markets, but my sense is that it should be better because the next 12 months will be very clearly aligned with the rate reductions and earnings are holding very well even at these levels of interest rates. So seeing an earnings growth of about 12-13%, this year we are talking about 1200 plus and next year we will talking about 1350 upwards. So earnings outlook looks to be pretty good, and interest rates will hopefully come down. So we should have growth much better than 10% recorded in the last one year.
ET Now: Markets always follow a cycle. Do you think now the consumer cycle from a stock market perspective is looking slightly mature or you think the India romances the consumer story and investors should still focus on consumer names and they should not log out of the HULs, the Nestles and the ITCs of the world?
Raamdeo Agrawal: Consumer stories are big right now and it is going to become even bigger in the years to come. The issue is that those stocks are clearly stretched for whatever earnings they have delivered so far, but the earnings, even in bad times, have done well. So as we go forward and prosperity comes in, my sense is that growth will continue. Now can you make a multibagger kind of thing from these stocks if you buy at 25-30-35 times?
Clearly chances are less, but this has to be part of the core portfolio. I am not saying that it should be 70-80% of your portfolio, but 30-35%, 40% has to be dominant consumer names. Maybe at times for 12 months or 18 months it might underperform the markets, but one should not let go off these stocks and on a 5 to 7-year basis, they will definitely outperform the market and give handsome rewards to the people who will hold onto them.
