Stock Market Returns: Don’t Expect Stellar Gains Over Next Six Months, Says Raamdeo Agrawal | Profit Exclusive

Indian equity markets may not deliver standout returns over the next six months, said Raamdeo Agrawal, chairman and co-founder of Motilal Oswal Financial Services Ltd.

The seasoned investor believes investors should shift their focus beyond short-term fluctuations and think with a five-year lens, especially as long-term value remains intact.

"I don't invest for six months. I look at the next five years," Agrawal said in an exclusive interview to NDTV Profit.

If there's a good business with growth and sound management, and the stock is reasonably priced, that's "good enough" to invest, Agrawal said. Not enough investors are willing to focus on understanding a company's intrinsic value, he added.

Agrawal believes the Indian market remains reasonably valued when viewed with a long-term perspective. “The potential of our economy is definitely rising", driven simply by the sheer scale, he said. The new RBI Governor, Sanjay Malhotra, appears growth-focused at aspirational levels, and the Indian economy is relatively protected compared to global peers, added Agrawal.

Despite short-term headwinds, Agrawal remains bullish on the structural strength of Indian equities. His advice to investors is clear: don't obsess over the next six months — instead, focus on quality businesses, stay patient, and let the power of compounding do its work.

Patience Is The Investor's Greatest Ally

Agrawal emphasised the role of patience in wealth creation. “Patience is not needed when things are going well — it's required when they aren't,” he noted.

Drawing on Warren Buffett as an example, Agrawal urges long-term investors to stay the course, even during periods of muted returns.

He acknowledges that Indian equities have delivered only 7–8% returns over the past year, but believes this does not reflect the underlying strength of the market or the broader economy. In fact, the most significant transformation, according to him, is in the nature of capital flows into the Indian market.

"The biggest revolution we're witnessing is in capital flows,” he said. Despite modest index gains, capital continues to come in, showing rising confidence. There's a clear shift from fixed income to risk capital — Indian businesses have never had it so good, he pointed out.

Risks Will Remain

Agrawal admits that risk — whether global, geopolitical, or currency-related — is ever-present. But he advises looking at returns over a decade, where seven out of ten years may be favourable.

“Even within a single year, you might have six golden months and six difficult ones,” he noted.

He's particularly optimistic about the broader development of capital markets in India — both vertically and horizontally. Liquidity is increasing, and more sectors are coming under investor radar.

“Quarterly decks today reflect company performance more accurately than ever,” he said.