In an exclusive interaction on CNBC-TV18 on Monday, March 3, Agrawal mentioned that the market is seeing a healthy correction after four years of relentless outperformance. He also mentioned that the correction has taken the Nifty multiple down to below 20 times price-to-earnings from 23-24 times earlier.
“If the Small and Midcap indices had gone up by say 70% to 80%, they have fallen between 25% to 30% and portfolios have followed as well. So excesses were clearly visible in the market, making everybody uncomfortable. So this is a very healthy correction,” Agrawal said.
Agrawal expects the Nifty Earnings Per Share (EPS) figure to rise from ₹1,050 levels to around ₹1,150 or ₹1,200 levels going forward as credit flow is improving, government expenditure is picking up and GDP growth is likely to be higher in the fourth quarter as well.
The market veteran also highlighted quick commerce companies like Zomato and Swiggy that are holding on at lower levels. While Swiggy is trading below its IPO price, Zomato is trading around 30% below its peak of ₹304. Zomato will also be entering the Nifty 50 index from March 28.
“This space will become very interesting,” Agrawal said. He added that this does not have 10-20 players but only two to three of them and others will find it difficult to enter. “As the pie becomes big, the fair value for quick commerce will stabilise,” he added.
2024 was a year which saw record selling by promoters through the QIP route as well as block deals. Agrawal believes there might come a time in two to three months while promoters start buying shares of their own companies. “These guys (promoters) are the smartest. They know the value of their company. So when the promoter starts buying, those will be the companies to track,” he added.
(Edited by : Hormaz Fatakia)
