Financial Services may face near-term challenges due to asset quality issues said Dhiraj Sachdev, Managing Partner and CIO of Roha Asset Managers.
“Financial services may still have near term challenges given post moratorium period has just started since September. Challenges do exist today due to asset quality and disbursement growth, and banks are still relatively cautious,” he said in an interview with CNBC-TV18.
Sachdev said that within the sector, he prefers housing finance companies (HFCs) and microfinance players.
“Overall we are currently selective to invest in this sector. However, we would prefer those where there is access to capital and the quality of the book is secured. Conservative private banks and NBFCs have up-fronted provisions and within NBFCs, we prefer secured lending companies like HFCs with low exposure to builder loans or microfinance companies despite being unsecured and at risk. Given that their target market is rural lending or agriculture which are in the essential category, selective opportunities exist in microfinance space as well,” he said.
Sachdev said that he is seeing a huge amount of capex in the chemical and specialty chemical sector.
“Despite the run-up, there is a possibility that returns may be modest in the near term, but going forward we are buying businesses for 5-10 years outlook given the fact that the market size of the opportunity is fairly big for specialty chemicals space,” he said.
He also said that he likes import substitution as a theme for sectors like medical devices and mobiles.
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