'Nifty Should Double In 5 Years To 45,000 Levels If Economy Does Well'

Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services, calls himself an optimist and fearless when it comes to markets ups and downs. He talks about how to deal with the current volatility in the market, where opportunities lie and his learnings from his guru Warren Buffett. In an interview with Nidhi Sinha, editor, Outiook Money, as part of the Wealth Wizards series, “the granddaddy of the market” also shares valuable lessons and insights on how to narrow down and identify the right companies

- Nidhi Sinha

The market has been volatile for the last 4-5 months. What's driving that and how has it affected investors’ behaviour and money?

Actually, markets are always uncertain and volatile. Sometimes there's volatility with an upward bias, and sometimes with a downward bias. Right now, it’s with a downward bias, which people call a bear market.

But we saw tremendous rise in the market in the last three years, particularly post Covid. From around 7,000-8,000 points, the Nifty is now at 22,000 levels, rising almost three times, which has been an unprecedented and fantastic run. In this period, people have created ₹300-400 lakh crore of wealth, across promoters and investors.

In the last three-four months, there is a little bit of volatility, but that’s the nature of the market, and it will continue like that.

But things will settle down with the New Year (financial year) starting, new promises, new credit flow, new earnings, projections, business outlooks, (changed) geopolitical conditions and other factors. The New Year opens up with a lot of hopes and it has just begun.

I am an optimist. So I hope that FY2025-26 is going to be better than FY2024-25 in terms of corporate earnings, which is like a market salary. Say, if my salary is ₹20 lakh per month, I expect ₹20 lakh to, say, go up to ₹22-24 lakh. Just like that, corporate earnings will go up. The Nifty EPS (earnings per share) was around ₹1,050 last year though it was expected at ₹1,150. Now we expect it to go to ₹1,200. Now let's see how things shape up, and that will decide where the market goes.

There's no fear within me, though my portfolio is also down like everybody else's. But it’s natural. It’s like you cannot just do anulom (breathing in) anulom (breathing exercise anulom vilom, that is part of yoga), you also need to do vilom (breathing out) to complete the asana. And that’s what is happening right now.