Agrochemicals top space choice, can sustain higher growth: Dhiraj Sachdev

In a chat with ET Now, Dhiraj Sachdev, Fund Manager-Equity, HSBC AM India, shares his views on the top space choice.

ET Now: If I were to ask you to remove your fund managers hat and put an individual investor who does not have mandates to invest in a particular sector up to a particular percentage. If you had to pick one top space in terms of choice and I know you will be spoiled for many because there are so many pockets that look like doing well over the next couple of years. But that which one would be that one top pocket?

Dhiraj Sachdev: You are asking me a very difficult question. I tend to diversify my portfolio as much as possible but we like agrochemicals as a space. Barring the issues on the monsoon front, agrochemical can sustain higher growth on a compounded fashion. It is a scalable business. For example, hybrid seed market is fairly under penetrated and most of these businesses or companies had engaged in this segment can sustain higher growth time after time.

The companies have shown lot of capital efficiency in character over the last few years with 25-30 per cent ROE and sustaining growth in excess of 15-25 per cent. So we like agrochemical space because it is very similar to pharma sector and the valuations are way off from what the pharma sector is quoting at. So that is one area where I would like to bet on.