‘Con­sump­tion, Fi­nance Themes to Play Out for Years’

The Economic Times - - Smart -

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.

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