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Ramdev Agarwal from Motilal Oswal Financial Services is joining us. Let's talk about numbers, markets and policy. Ramdev ji, as we say, God gives us tremendous quarterly results. Will it sustain? There are two components to it. One is the operating profit and I think it will sustain. In fact, it will accelerate the operating profit side.
It will surprise outsiders as well. And in my own corporate plan, I can tell you that this is mostly on the operating side, but the mark to market is God's grace. The treasury is an integral part of the company, but treasuries don't reduce the market performance. My average rate of the treasury is 18.5 per cent.
Yes, it is better than the stock market average. Yes, it is better, much better, but at 18.5 per cent, every year, some times it will be 40 per cent. Some times it will be 5 per cent. So, 23, 24, 22, 23, there was zero mark. To market, we end 23-24, it is recorded, so the moment one year slows down, next year it makes it up, so this year is a year of performance, next year I mean if the market does 20, we will have a record performance from that side also, but if the market is flat and negative I can do nothing about it.
So Ramdev ji, there is a sustainable business in which there is no volatility, but what about the business of Matilal Oswal Services, the capital market will play the biggest contribution in this, there will be more money in a good bull market, but in a bear market the business will slow down. If we talk for example, the sector which went Nifty had increased to 10, there was record volume, and perhaps it is visible in your numbers, so if our profit is not visible, it means it is looking good, there has been bumper cotton sector growth, but when there is slowdown in the market, will it not make any difference, there will be a little difference in your business, growth will slow down, but from this, look at the growth, that is, look at it in 12 months or a quarter.
You are not just for anybody, you should see what happened in a block of years, what happened in a year, what happened in 10 years, that journey will not change, like when the GDP increased from two to four trillion, what happened if it increased from four to eight, and what will happen if it increased from eight to 16, you should see how I would look at it because we enterprises, we can control day to day what the client will do and what the market does, so on the operating side I said because the participation is increasing, the daily is climbing by 70-80 per year, the mix is changing, the mix is changing in favor of cash, now we have a large market share on the cash delivery side, so that's our because we have research focus on the client interaction, so the delivery side is very rich, so that is doing very well and most like as the market expands horizontally and the new issues come, I mean it is not going to all the companies are not All the companies are going to remain in cash, so the cash volumes are going to explode after our power is very strong and in my sense, if you ask me at least for this quarter and visible for the four quarters, I would think calendars are very rich in terms of events and the numbers are increasing, I would think that long profit growth will be very predictable, probably it will be stronger than what we have seen in the past.
So if any of our viewers want to invest in Matilal Uswal Securities shares, can I tell you one simple thing: look at the management quality, one simple thing: the framework of Koji LP, follow the quality, look at the longevity, look at the price, look at the earnings and everything, I will tell you one thing, not only in any company, what is the trend in the business, the trend is God, keep this in mind, in the business in which there is no wind, the price, the God, the new trend is good, trend is God, I don't know what to say in Hindi, trend So the trend is in the direction of the wind, so whatever the wind is blowing, like in a kite, if you are going to fly a kite, if the wind is blowing then even a donkey can fly a kite, and if the wind is not blowing then even an archer faces a lot of trouble, yes yes, that is the situation, like when it was 95 to 2000, when the boom happened, the prices of donkeys and horses had increased 100 times, such a boom is there in the capital market that the market has not recognized, take the data of options, people say that there is no wind but a storm, there is not a storm there, it is a tsunami, do you understand?
So what I am saying is that you must look at the trend peacefully and why is it happening for 75 years, we had only 40 million demat accounts, in these years we have grown from 40 to 140, you just see at what speed it is growing and according to me it is headed for half a billion, but that will take 10 years, so this is a 10- year tsunami and it has a precise character edge.
I said that people who come to Ayodhya, they come back after darshan, those who come here for darshan, they stay here, so you think how much fun it will be, will there be more happiness on your face than Ayodhya or more happiness than Zomato shares, no Ayodhya, of course it's a spiritual thing, it gives a lot of satisfaction, you know seeing the way a temple has come up, but you know when you come to invest in the digital companies, they really excite us, the kind of business model they have, the kind of business they have, and actually Indian capital market, particularly what we see in a digital environment, it is more digital than even Zomato orders, order taking is digital, but delivery is 100% physical, they have to pick up the stuff and deliver to the other side and they have to be flos, I mean you do a trade, you just punch the button, it's done, settlement is also digital, so plus one you are settling and how much 5 to 7 trillion dollars there is There is no machine in the world like this, so this is very deadly, meaning what is happening here is the combination of digital, combination of number of customers coming in, and combination of new issues coming in, and the economy also growing, so that means multiple factors and loop effect.
So when the trend is big in anything, like the cap is happening, railways, defense, see the condition of all the stocks, similarly it is happening in the capital market, so I think it will be one of the, if not the strongest sector for the next 10 years, it will be among the top three. Talking about the Lolla Palooza effect, the audience in Mumbai will say that Lolla Palooza is a music event, but it is not a music event.
Chali Mangar Sahab had explained that Lolla Blues happens when factors come together, and perhaps those factors are not in your control, but when they come together, it has a result, and such things are unimaginable, that you cannot always imagine it. Ramdev ji, so the last three questions, a basic question for everyone.
I believe that whenever we talk to experts, there is a bubble in small caps, otherwise there is trouble. If there is a bubble, then there is trouble. Well, is there a bubble or is there a trouble? Now, at this time, because people have jumped and made money in small caps, they can either take out cash after booking profits at 15-20 or go to large caps.
Yes, I mean, you can book profits in your stocks which have done very well and the price has gone up a little bit, the valuation has gone up a lot. I mean, there are people who want to buy from you, give it to them and you look for other counters. Because one thing that I told you earlier, there is a lot of variety in small caps, there are thousands of stocks, so you will find very expensive ones there, you will find expensive ones and very cheap ones too.
So, it is not that you of the small cap batch do not understand large caps. I mean, people, I mean, a small man understands small companies, so it is not necessary for him to go to a big company and bother himself. So, in this market, what we always say in Hindi What is cheap, beautiful and sustainable?
The index is cheap, beautiful and sustainable, i.e. Nifty, Nifty and SNP 500. I would rather prefer SNP 500 ETF because in SNP 500 you get all the masala. If you suppose tomorrow some big FI goes crazy on India and they buy like crazy, then large cap will run, it is not in their control, meaning you have to invest 50-100 billion in India, an opportunity may come after May, our GDP will actually be 24%, do not give these prices, RBI Governor has said this, but nobody takes it seriously, if actually post election, your stabilization is good, and after that the GDP outlook is 15%, and the earnings growth is 15%, it is not that price, so what if a lot of money will come, then large cap will run, when large cap will move, then the way of spec way towards large cap, firstly liquidity is very easy, in small cap, so what if liquidity is less but there is a lot of action, small cap rise In orderly fashion, sorry, large caps rise in orderly fashion, small caps rise and fall in disorderly fashion, don't say 15% up or 15% down, you know your SBI doesn't do like this, one or two plus minus, then gradually there will be correction of this type, so it gives a lot of time, so actually investing is in large caps in orderly fashion, but if you go ahead of the crowd, you know the story very well, you can really figure out that this company is undervalued, all these small things go wrong, so the last question is, you always say that brother, mean reversion is the biggest tourism of capital market, let me tell the viewers, what does mean revision mean, what are long term averages, where are the shares much higher than the long term averages, where are the shares below the long term averages, PSU stocks were below the long term averages in Covid, but many stocks which are above the long term averages, so where do you see mean reversion happening, from bottom to top, from top to bottom, that's what I told you, see mid-mid cap in relation To large cap is expensive made small expensive if you do the ratio it is at an all time high it can go higher or it can go a little higher but this ratio has to be corrected now we have to correct the ratio actually mid cap falls and large cap goes up so let's hope large cap goes up the world has been in this hope so thank you very much for taking the time we get to learn so much and we the viewers will learn what to do at this time as Ramdev ji said when God gives us a lot but my request is that people should not become pundits you have patience to stay in the market you can do anything in the market buy and sell you can choose your portfolio that's all fine or we have business but don't go away from the market don't time the market this time is different spend time in the market time in the market remain allocated roam around comfortably book profits and come back after roaming around but don't try to time the market and don't get Into the global economy, don't try to think and link it with the a lot of complicated global affairs, nobody knows, they say it is simple, Rakesh ji used to say, KDR ji used to say that too much of analysis leads to paralysis, so save yourself from getting paralyzed, keep it simple, keep it safe and invest in the market, down side is limited, up side is quite high, what a thing, risk reward risk is simple, downside less, up side go, Ramdev ji
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