PSU banks, telecom and Power sectors are on the radar of Raamdeo Agrawal of Motilal Oswal. (Image:FE Graphic)Another year has gone by, and even as you take stock of your portfolio performance since previous Diwali, you may want to consider Raamdeo Agrawal’s top bets to brighten up Samvat 2074. In an interview to ET Now, Raamdeo Agrawal of Motilal Oswal said, “PSU banks which are down and out right now, can they come back? I don’t have any doubts. They will bounce back.” Interestingly, PSU bank shares have abysmal returns in the year so far. State Bank of India shares have returned less than 1% since January. Allahabad Bank shares have tanked by more than 8% in the last one month. Andhra bank shares have given negative returns in 3-year, 5-year and 10-year basis. These returns are in stark contrast to the BSE Bankex returns of more than 34% in the year so far, buoyed primarily by the performance of private sector bank shares in the year.
Raamdeo Agrawal sees opportunity in another bleeding sector– telecom. “The new profit pool could be from telecom, because the consolidation is now real, and the opportunity size is becoming just too big. It’s not going to happen in the next 12 months, but it’s going to be a large profit pool.” At a time when the Telecom industry is going through a lot of financial stress, Motilal Oswal says that there will be a turnaround. Raamdeo Agrawal explained, “ In 2002-03, Bharti had losses of Rs 200 crore. In 2008, they earned Rs 7,000 crore. That’s the kind of growth in telecom, because of huge operating leverage. We are not very far from a rebound.”
In the same interview, the market expert said that even the power sector is seeing a lot of recovery. “Power Sector can make a turnaround. If you the the last two months, the power demand is good, the prices have gone up. Their economics will improve,” he said in the same conversation.
