About the class of ’21 stocks that went public in 2021 and 2022, he said some of them could make it big.
“There is no more hype. There was a lot of hype and a crazy kind of valuation in November and December last year. Those things are gone. 60-70% correction has happened now,” Agrawal told ET NOW while praising promoters of the new-age companies who want to make profit very quickly.
“Some of them will be very successful and some of the companies are very unique. There are no me-too companies in that particular segment,” said the value investor whose team has been meeting the management of new-age companies.
“We are trying to figure out the path to profit or the size of the profit. Does it have a connection with the current market cap? Can we see the light of the day in what they are saying that we are going to make Rs 1,000 crore profit in the next 3-4 years?,” Agrawal said, adding that the way to go about now is to put small bets as some of them will become very large.
New-age stocks like Paytm and Zomato were among the biggest wealth destroyers in calendar year 2022. On the back of improving focus on profitability, the stocks have seen some buying interest in the last 1-2 months.
So far in 2023, Nifty is down around 3.7% amid selling by FIIs and a lacklustre Q3 earnings season.Agrawal says nothing can stop the stock market from rallying once the earnings growth picks up.
“As the market gets confidence on next year’s earnings growth, I do not think it is going to wait whether FIIs sell or they buy, the market will just blast,” he said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)