'I look for companies which increase their dividends'

Soumya Kamath        Print Edition: November 2011

Motilal Oswal, co-founder, Motilal Oswal Financial Services, says he is bullish on the financial services space-

What is your view on the market?
My view remains positive. It has become more positive after commodity prices have started falling. I am more convinced now than anytime in the last one year that interest rates have peaked.

Are you concerned over global economic developments?
When you are in the market, you deal with uncertainties at all times. This is what creates price discrepancies and opportunities. I try not to focus too much on the macros, whether global or local. They are important, but there are too many moving parts there. Beyond a certain point they are useless. I try to focus on the money a company will make over the next five, 10, 15 years.

Will returns from commodities improves?

Have you churned your portfolio in recent times?
We are currently leaning very heavily towards consumer discretionary sectors, because we know that the opportunity in this space is humungous. We are betting on companies that can grow more than the market.

Which sectors are you bullish on and what are the top stocks in those sectors?
Over the long term, I think the BFSI (banking, financial services and insurance) space will do extremely well. We are looking at a $10-trillion savings opportunity over the next ten years which will require higher intermediation and so offers huge potential for banks, insurers and capital market companies. Our top pick is HDFC Bank.

What is your advice for retail investors?
I wish to remain invested in stocks which have least variability in profits over long periods of time. Obviously, such companies are largely found in sectors which are secular in nature. I also look for companies which continuously increase their dividends over long periods of time. If one includes such stocks in the portfolio, they will turn out to be great wealth creators.

What is your view on real estate stocks?
Extremely compelling valuations for risk-takers. The best managed companies could be multibaggers over the next three-five years.

Are you diversifying into other asset classes?
100 per cent of my personal investment is in equities. I have a flat and a little gold jewellery to keep my wife happy.

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