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Mr. Agarwal, good having you. Thanks so much for joining in. Good afternoon. Not quite what the markets wanted. Is this also a sense in in a sense an overreaction because we had a very sharp rally on Monday? How do you think about the reaction and what could happen in the near term? Yeah, as you said it is reaction to yesterday's action.
The expectations set by opinion poll was very lofty and now what the numbers are coming out is very disappointing. So, the reality Now, this is a reality and that was a just a perception or expectation built. And clearly there is a complete mismatch and so my sense is that bulk of the bulk of the damage is done today and stock-wise it is even far deeper in some of the cases.
So, my sense is bulk of the damage in those counters are done. Now, now one is a mandate and second is the formation formation of the government. I hope with the 290 or 294 or 300 whatever NDA you have. I mean in the rightest spirit we should get a There is a mandate for NDA with 300 clear way above the majority.
So, if we get NDA I mean of course it will be weaker BJP itself. So, the management style which was far more central in Delhi, I think that has to become lot more participative. And still we might I mean this is the power of leadership, this is the power of imagination that the India story should not only continue but it should gather momentum once this uncertainty of forming the ministry or that gets over.
That'll be in next one week or so. We'll see what kind of permutation and combination come come about. Mr. Agarwal, a lot of premium baked in into what a Modi 3.0 would have done in terms of policy, what it could have done in terms of earnings etc. Now, do you think the market waits a while for that to translate into reality before rewarding?
What I'm just trying to understand is Could it well happen that for the foreseeable future we may meander around these levels instead of sharp upsides that we've seen every single point of time the market has seen a dip? Can you hear me, Mr. Agarwal? Yeah, I can hear you. Okay. So, So, Yeah, can you repeat that?
Yeah, I was just saying could it well happen that now the markets may stay tempered for a bit because we had baked in a lot of positives in terms of execution from a 3.0 government. Now, that that may not be exactly as per script, will the market take its time instead of a sharp pullback in the next 2-3 months?
Yeah, I think in the short run we are I mean we are too hasty in terms of descending and a lot more things will happen in terms of permutation combinations as we go forward. And even the economic factors like geopolitics, your oil is down down by $10, interest rate cuts are now being talked about. Monsoon is going to be good.
So, a lot of other things also come into play in the when when we talk about the corporate earnings and the economy. Basically, the you know, the sense I'm I'm getting is that the the economy was very tightly managed, extremely well managed and hence finally we were getting about 8% or 8% plus growth.
Markets were doing very well. There is a retail boom going on. So, all this party which was on in India, that has taken a kind of a break. I mean kind of a jolt, not break but jolt for the time being. So, in next 1 month I think next 1 month is going to be very crucial. And so long as uncertainty is there in the political front I think markets will be like at best markets will be sideways or it could you could see the bouts of buying and selling led by FIIs, domestics.
This uncertainty will continue for quite some time and markets may consolidate here or maybe maybe a little weaker also. Mr. Agarwal, good afternoon. Tamanna here and great to speak with you of course on such an important day as well. Talking about the political uncertainty as you were mentioning. Now, couple of things seem clear.
Like you said, the NDA is set to form a government for the third term. They are above the halfway mark. Considering that BJP is the single largest party right now, it's it's pretty clear that you will have Modi as Prime Minister. So, you're going to have maybe a different version than what was imagined but a Modi 3.0.
Then your key portfolios FM and HM. So, once your troika is in place which is PM, FM and HM, do you think that would be calming for the markets or would this minutiae matter that the BJP by itself doesn't have 272 and what happens next? Yes, so the how the dialogues go with their partners because since majority is very thin and hence the bargaining power of minority minority parties, I mean these 15-20 seats guys, they have a lot of bargaining power because of the type of mandate it has given.
It is like saying that we want you and yet we we have not given you the mandate. I mean they have not given you enough seats. So, you have to go and kind of settle with the other side in terms of bargaining. So, the bargaining power of majority which is BJP with 240 seats would also be considerably weakened.
And how this can they convert can I mean this is where Modi ji's magic will come, whether he can convert the current weakness into his own strength and and whether those kind of things can happen because opportunity is very large. Economy has the momentum. They've got a clear mandate. There is no reason to go anywhere beyond the NDA itself to to form a very good government.
The only thing is that it was expected that they themselves will have internally more than 272. That has not materialized. So, I think So, my sense is that the moment government formation happens, I think a lot more positivity will come back to the markets. Mr. Agarwal, so it's it's clear that you are going to see an NDA term three.
I mean the only question is because the expectations were set so high. We've had split votes for several years and several elections in Indian's parliamentary history. Expectations were set high. Now, having said that the new government and as of now it seems it's clearly an NDA government, little doubt there.
Do you think the focus now because of these results shifts away from what the street was pricing in for a Modi 3.0? So, more focus maybe on rural distress, more focus on what is seen as populist politics. Is that a concern that will last beyond the 1 month that you're talking about? I mean God knows what is how things are going to open up and what kind of policy change or shift which is going to happen.
So, the I mean they are yet to reconcile this particular mandate and what kind of dialogues come, what kind of interviews come and what actually happens on the ground. And will will some more people join NDA? You know, if it is 300 or whatever 295, 297, can some more people join from independents and all another 10-15-20 guys so that the bargaining power of the other guys, other minorities, that will come down.
So, a lot of things are going to happen as we go forward. And as as so as the more certainty returns to the political management and the power that be I think markets will start slowly If you might have seen today, the moment you know, the the the seats started stabilizing and recovering, markets also recovered.
So, clearly people are realizing that the markets will realize that they had overdone yesterday, they over not They have corrected whatever was done yesterday and maybe some overdone today and maybe some more corrections here and there. And then if the broad story of India growth is story, India earnings is story remains I don't think any political party is against India growing very rapidly.
So, and since NDA is coming, Modi ji's leadership will be there. I think broadly we should be fine but with a little weaker a weaker kind of a sentiment to start with. Hi, Mr. Agarwal. It's also Samina joining in. Up until now the last couple of months, the big play in the markets was anything with sectors preferred where policy continuity was expected.
So, defense, railway, infrastructure, power, valuations of course aside. Given the juncture we are at right now, would you reconsider or recommend investors to rejig their portfolio if they've been overweight on these sectors? I think it's too early to look at portfolio changes. It will take some time.
I mean very character of the what you call formation and what utterances what policy announcements come. I would rather wait till but I see if something is overvalued and you had to sell, you better sell. But I don't think the broadest story of say Indianization of defense or building of railways, building of infrastructure.
I don't think that this story is going to go away whoever is in the power. So I would not I would not just because there is a little weaker mandate, I would not get out of the stock just because of this. But if the stock is grossly overvalued, you're already in thinking about getting out of it, then better you can get out.
Mr. Agarwal, your your of course Motilal is in such a client-centric retail investor focus in terms of I mean you have the pulse of the retail investor. While we consistently recommend and you do as well that investors should invest in a staggered manner. STPs is how wealth is created. Trading is not how wealth is created.
Would you recommend investors to upfront a little bit of those STPs in this current correction? So one thing is that whoever is committed to the SIP, that SIP must be honored fully. Whether you should start if the market corrects a little more, I think this is a great time to start SIP. See one of the good thing about SIP is that you start at any point of time in 5 6 7 years, it doesn't matter.
You get the some share of good time, some share of bad time. So right now you start with the bad time, you are likely to do well as the good time comes. You start with the good time like say somebody started 2 years back, now they are seeing little tough time in terms of corrections and all. So it's part of the deal in a 10 15 years of SIP, many good times will come, many bad times will come.
So it is always a good time to start your SIP. Mr. Agarwal, um one one final question from my end a ing to powe moved is else PSUs e. See India is a compounding uh almost head-on Cargill, apability of this industry country is concerned, that is not even an atom 1 year. I would say in instead of 5 years, I may say in 6 is judgment are seeing is a political mandate and we have seen a 03 or 2007 the which ended up in global financial crisis.
We had all minority government of very weak government dispensation in Delhi and yet the economics what and countries countries economics, countries earnings, countries corporate profitability, they all are Mr. Agarwal, a e or ? Uh ing to grow will continue to grow will grow and . I mean valuation apar in ed.
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