Speciality Chemicals scalable and capital efficient in character: Dhiraj Sachdev, HSBC AM India

In an interview with ET Now, Dhiraj Sachdev, Senior VP & Fund Manager-Equities, HSBC AM India, shares his views on portfolio strategy. Excerpts:

ET Now: If you had to indicate one space this Samvat to the next Samvat, something that you believe fundamentally can outperform, which one would it be?

Dhiraj Sachdev: We like specific space like Speciality Chemicals. There are few secular things which are happening in this segment. One is clearly when Speciality Chemicals segment they discharge lot of affluent which needs to be treated before it is charged. Because of the environment pollution norms in China, lot of facilities are shut because of this and global offshoring has shifted from China to India.

The global size of Speciality Chemical space itself is close to $4 trillion and China alone is about trillion dollars while India is about $100 billion so one-tenth the size of China and any shift from China to India in terms of outsourcing of niche Speciality Chemicals will actually buoys earnings of most of the Speciality Chemical players.

Besides, the Yuan appreciation and crude oil correction means the margin expansion for most of these players and the application of these chemicals are in variety of industries from paints, colours, water treatment, chemicals, textiles etc. This is one area that we like as an opportunity over the next 12 months though it is more secular over a period of time, scalable and capital efficient in character.