Raamdeo Agrawal's top sector picks for your portfolio

Every market is a good market for investing so long as value investing is practiced on its merit believes Raamdeo Agrawal, Director & Co Founder of Motilal Oswal Financial Services. “There are lots of opportunities to try one’s value perception.”

Speaking specifically on sectors, Agrawal said he sees huge opportunities for value investing in midcap banks and cement sector. In the auto sector, he placed his bets on the two-wheeler industry. ”The two-wheeler opportunity is huge with limited competition.”  He also feels there is huge growth potential for the tyre companies.

However, Agrawal is bearish on the sugar sector. “The sugar sector is domestic demand driven and it is difficult to find values,” he said.

Here is a verbatim transcript of the exclusive interview with Raamdeo Agrawal on CNBC-TV18. Also watch the accompanying video.

Q: Is it a good market for value investing or are you scratching your market to find some value that you can spot and buy into?

A: Every market is a good market for value investing so long as value investing is practiced on its merits. In this market there are lots of opportunities to try one’s value perception. At 17,000 the market is where things are not cheap but still one can find values in those so-called unfavourable segments of the market.

Q: Is it becoming a capitalisation search where it’s midcaps versus largecaps or a sectoral search or neither when you look for these value buys?

A: To some extent it’s going to be a sector search also—where things are completely beaten out of shape sectors. Some of the sectors are out of favour like telecom, cement, public sector undertaking (PSU) banks—these are kind of very large aggregates, which are not so much in favour as much as the market is. That gives an opportunity to look for in this 50-100 companies where the opportunity is.

Even in small, midcap steel companies or sponge iron companies where now metallic prices are going to move up or have moved up recently. So you will get some opportunities in those spaces. So you have to find values looking at what is happening in the business conditions.