‘Consumption, Finance Themes to Play Out for Years’
In an exclusive interview to ET NOW’s Nikunj Dalmia, Ravi Dharamshi, CIO, ValueQuest Investment, says consumption, financial inclusion and speciality chemicals themes are going to continue for the years to come. Edited excerpts:
What’s at the heart of your portfolio? The heart of our portfolio for the next 10-20 years will always remain consumption-oriented stories. The overarching theme in India remains the consumption. We are still not gung-ho that the capex cycle is going to revive. So, there might be pockets where the capex cycle can start seeing some green shoots in a year or so but making capex-oriented companies as core of our portfolio. The other theme which you have liked in the past is financial inclusion. Financial inclusion again is a trend which we believe has no choice but to pan out and it has the government’s push, consumer pull and it has all the infrastructure getting in place whether it is financial infrastructure or the learning curve. One way to play that is through distributors of financial products and another way to play that is a new breed of banks that are listed — small finance bank. The micro finance companies that are now getting converted into small finance banks, have a good 10-15 years ahead of them where they can actually grow.
On speciality chemicals stocks Theme very much remains intact, but you have to get into the finer nuances. There are a few challenges with the chemical industry. One is scaling up and second is execution and the third is figuring out whether this is really a speciality chemical or a commodity chemical. If it is a commodity chemical and you might be benefitting currently because of some artificial shortage, then that cannot last beyond couple of years. The cycle will turn again. Finding a company that can scale up, we have companies in the space which are at ₹ 200-300 crore size and they claim to be global leaders.