Motilal Oswal Group Chairman Raamdeo Agrawal has stated that US President Trump's policy decisions do not influence his investment strategy, despite ongoing global market volatility caused by tariff uncertainties. Speaking at the CNBC TV18 Market Forum "The Alpha Generators for 2026", the veteran market expert emphasized his focus on domestic opportunities and familiar investment territories.

Global Interdependence vs Local Focus

Agrawal acknowledged that Trump's decisions have worldwide implications due to increasing market interdependence through multilateral globalization. However, he maintains a clear separation between global macro events and his personal investment approach.

"One side Trump is happening, and on the other side, AI is happening. I don't know how to figure out which one will impact how much. So, I am very happy that I am in India. I do things that I understand, and you need to have a view on four-five things and find ideas out of it," Agrawal explained.

Investment Philosophy and Market Uncertainties

The market veteran described equity as an "exotic" asset class with unique characteristics that distinguish it from other investment options. He emphasized equity's resilience in absorbing various market uncertainties and volatilities.

Entrepreneur Selection Criteria

Agrawal highlighted the critical importance of identifying exceptional entrepreneurs who can perform effectively during challenging market conditions. "Equity has a huge power to take in a lot of uncertainty, and yet, there are few entrepreneurs who can act like a magician and navigate all kinds of risks. We have to find them who can navigate such hard times and deliver earnings," he stated.

The market expert's approach centers on finding business leaders capable of maintaining performance and delivering consistent earnings despite macro-economic headwinds and policy uncertainties from major global economies.

Raamdeo Agrawal, Chairman and Co-Founder of Motilal Oswal Financial Services, has identified India's public sector banks as among the most attractive investment opportunities in the current market environment. Speaking to ET Now, Agrawal emphasized that the fundamental problems that plagued PSU banks between 2008 and 2020 have been largely resolved, creating compelling investment prospects.

PSU Banks Transformation and Investment Appeal

Agrawal highlighted the significant transformation in PSU banks' operational framework and financial health. The banks have cleaned up their balance sheets, eliminated directed lending practices, and adopted professional management structures with strong technological capabilities, particularly among larger institutions. He noted that leadership transitions in PSU banks often proceed more smoothly compared to private lenders that rely heavily on long-tenured, charismatic CEOs.

Among PSU banks, Agrawal specifically mentioned State Bank of India as particularly attractive for investors seeking exposure to this sector.

Credit Growth and Economic Multiplier Effects

The market expert anticipates that falling interest rates combined with rising credit growth could trigger significant multiplier effects across the Indian economy. This economic momentum is expected to begin with rate-sensitive sectors such as housing before gradually expanding to broader consumption patterns. Agrawal explained that housing sector growth typically leads to increased demand for plumbing, furnishing, labor, and eventually drives broader consumption trends, creating a domino effect that builds momentum quarter after quarter.

Domestic Demand Strength Amid Global Uncertainties

While acknowledging global trade uncertainties and the shift from multilateral trade towards bilateral and self-reliant policies, Agrawal emphasized India's fundamental strength in domestic demand. The domestic market accounts for approximately 70-80% of India's economy, providing significant insulation from global trade disruptions. He noted that the government has multiple tools to boost purchasing power, including lower taxes, cheaper credit, and policy support measures that can be expanded in upcoming budgets.

Market Corrections and Valuation Reset

Agrawal attributed recent market corrections to excessive valuations that accumulated during the post-2020 liquidity boom and retail investor surge. He observed that stocks growing at 40-50% but priced at 100-200 times earnings face inevitable disappointment when growth moderates to still-healthy levels of 20-25%. The correction reflects pricing excess rather than fundamental business deterioration, as investors often confuse momentum-driven speculation with genuine long-term investing.

FII Return Conditions and Earnings Outlook

Regarding foreign institutional investor flows, Agrawal believes meaningful FII returns are unlikely until India's valuation premium narrows or earnings growth accelerates significantly. With India trading at approximately 25 times earnings compared to 15 times in other emerging markets, the country has become a funding source for global investors. He identified two potential catalysts for reversing this trend: either a sharp market correction or robust earnings growth at 20% over the next year, which would automatically moderate valuations and attract FII interest.

Agrawal maintains a bullish outlook on earnings growth over the next 12 months, driven by improving credit growth and strong domestic demand fundamentals, while emphasizing that long-term investment success requires discipline and realistic expectations about company growth rates and appropriate pricing.