'Successful investing is a piece of art'

Successful investing is a piece of art," says Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services. Agrawal, and his team, recently brought out the 27th edition of Motilal Oswal's Annual Wealth Creation Report tracing India's successful companies.

- Ram Sahgal & Satish John

MUMBAI

"There's a lot of liquidity, the economy is bigger, and the opportunity size in India is growing at 12% every year. You can't deny it," Agrawal said in an interview. When asked about investment opportunities in a market where valuations have soared, he pointed to a time-tested market wisdom: "What is hated is where the biggest opportunity lies.

Edited excerpts:

At one time, the company that was constantly featured in your wealth report was Hero MotoCorp. Much has changed in your latest wealth creation study, which is in its 27th year. New companies have come in, and new business models.

Our problem is markets have become so expensive compared to what we have seen. In the 1990s, I distinctly remember, I used to stay in a building where junior Asian Paints executives used to stay, and I was pally with all of them. I knew it was a great company. But my parameter then was to not buy beyond 15 P/E. It used to be trading at 19-20 P/E. I said to myself let's buy at 20 P/E. By that time, it became 23-24 P/E. I was evolving to some extent, and the stock was going higher and higher. I remember I tried to buy a 23-24 PE, and it came up to 26 PE. One of my dear friends suggested we wait until the stock hits 23 PE, and then we'd buy. But we never saw it come down to that valuation, and now it's 100 PE. So, we don't know how to justify this 100 PE or 80 PE (Asian Paints' valuation today) because we have seen 15-20PE. The guys who have started investing now have seen only 50-60 PE, so it's easier for them to reconcile.