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Will remain fully invested; Q1 earnings hit to be lesser than year before: Raamdeo Agrawal

Updated : April 20, 2021 12:15:58 IST

Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services on Tuesday said that the rising COVID cases will impact earnings in Q1FY22, but expects it to be much better as compared to Q1FY21.

“This time the spike in COVID numbers are almost 2.70-2.75 lakh every day, but the fear is much lesser, which is most important and that is what is going to guide us as we go forward. Earnings will definitely get impacted in this quarter as last quarter, though this quarter will be much better than last year’s Q1,” he said in an interview with CNBC-TV18.

Agrawal said that the risk perception of COVID is far more muted this time, but it is too early to say that markets have bottomed out.

“I think the risk perception is far more muted compared to last time. Even government bodies are muted in terms of lockdown. They are continuously coming and saying that they are not going to lock down the whole nation because the economic cost is far higher than whatever is the human cost right now. It is unfortunate but the cost of lockdown for the economy is far severe. So, I think that is what the market is weighing. But I don’t think one should call it we are through the hump. We are still in it, I would think that it will take some time before we can finally say that the fear has peaked out and hence markets have bottomed out,” he said.

He said that he will remain fully invested in the market and look for margin opportunities. He also said that too many portfolio changes in a volatile market could be harmful.

“We are hearing the insurance bonanza for the month of March and maybe next year is also expected to be big for the insurance sector. So these kind of portfolio changes you must definitely do. But, otherwise, doing too much of activity just because there is volatility in the market, could be harmful. I would think that one should remain controlled, and impart patience because a lot of things which are looking very bad today, will look very good just 3 months henceforth. So I would say that control your emotions and stay put as much as possible and at the margin make changes like normal times,” he said.

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