Raamdeo Agrawal, co-founder and joint managing director of Motilal Oswal Financial Service
Raamdeo Agrawal, co-founder and joint managing director of Motilal Oswal Financial Services, in an interview with CNBC TV18, acknowledged that the commodity prices, which have stabilised albeit at very high levels, have hurt margins of the corporate world.
He said that barring one or two sectors, margins have declined everywhere and in the upcoming April-June quarter the loss of margins will be more intense and much more widespread.
“In June quarter, the loss of margins will be more intense and much more widespread, but how much of that will companies pass on to the top-line growth with a lower margin, only time will tell,” Agrawal pointed out.
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He also added that conversion margins for many of the metal producers are under pressure.
With regards to the recent mega-merger of HDFC and HDFC Bank, Agrawal apprised that it gives a very different level of scale in the product portfolio. It was quite expected and should have been done before and it would be beneficial in the longer term, he noted.
Agrawal also commented on the wave of new-age digital companies, like Nykaa and Zomato, on the stock exchange and their performance. He opined that, unlike other categories, a market leader in the digital segment emerges quite quickly.
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“The best thing about this digital business is that in every category, in three-four years’ time you see two-three leader companies are left… of 100 companies, 75 may get wiped out, except 2-3 companies emerging in each category,” he said.
He also added that in the next 5-7 years the country will see very large companies coming from the digital segment. Agrawal believes that a tech boom is on with little competition for India.
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