You are here: Home » Budget » Reactions » Financial Sector
Business Standard

Quality with growth will continue: Raamdeo Agrawal

This year's Budget lays a firm foundation for at least a four-year positive run for the economy and markets

Business Standard 

Raamdeo Agrawal
Raamdeo Agrawal

Arun Jaitley's speech suggested a sea change in the budgetary process, one that is professionalised and de-politicised. The also seemed to suggest the government's willingness to listen to various stakeholders, rather than pushing through a pre-determined game plan.

This year's lays a firm foundation for at least a four-year positive run for the economy and markets. The first major impact will be felt in FY17, when revenue growth will be visible on the normalised devolution to states..

Read our full coverage on Union Budget

When it comes to stock markets, a key theme of the recent past was 'quality with growth'. Companies with high-quality businesses, run by high-quality management, and recording high-earnings growth delivered disproportionate stock returns. This theme should continue for some more time to come. With the lowering of tax rates, expect blue chips (i.e. full tax-paying companies with large profits) to become bluer.

Next, in the near term, all sectors related to housing should do well - select real estate companies, housing finance companies, and housing material companies (paints, cement, sanitary ware and plywood, among others). In the medium to longer term, expect domestic cyclicals and rate-sensitives to start looking up - mainly infrastructure/construction, capital goods, and non-banking financial companies.

Also, with public sector banks gaining the government's attention, we should expect significant profit and stock action there as well.

Stock markets are increasingly becoming multivariate and complex. Amidst all this, retail investors are best advised to participate through disciplined investment in high-performing mutual fund schemes.

Raamdeo Agrawal
Joint MD, Motilal Oswal Financial Services Ltd

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, March 02 2015. 00:01 IST