Roha Venture’s Dhiraj Sachdev sees select consumption value, backs banks, NBFCs and autos

The Indian consumption story is not a monolith, with certain segments offering better value than others, while opportunities are emerging in banking, non-banking financial companies (NBFCs), and the auto sector, according to Dhiraj Sachdev, CIO of Roha Venture. In a discussion on market fundamentals, Sachdev shared his top sectoral picks and investment strategies.Sachdev stated that while consumption is structurally positive due to under-penetration, an improving credit cycle, lower interest rates, and policy initiatives, investors must be selective. He highlighted a clear shift from unorganised to organised players across various segments like digital media, jewellery, value fashion, and even alcoholic beverages. However, he is cautious about certain parts of the consumption basket. “We are avoiding durables that are expensive on valuations and the fast-moving consumer goods (FMCG) segment, which are facing direct-to-consumer (D2C) competition… and have slower growth rates,” Sachdev explained.

Addressing concerns about Foreign Institutional Investor (FII) outflows, Sachdev does not believe the trend will persist, especially due to the rupee’s recent depreciation. “In case the rupee has already depreciated about 4-5%, it’s quite possible that FIIs would like to come in maybe early part of next year… and not only gain on the currency front but also on the equity given the valuations in some cases have corrected,” he opined. He does not see the rupee’s movement as a trigger for further pressure from FII outflows.

Sachdev also clarified his perspective on ‘contra’ opportunities, distinguishing them from sectors like electronic manufacturing services (EMS), which he considers a well-discovered theme with demanding valuations that lack a margin of safety. Instead, he defines contra bets as “quality players where they are passing through temporary growth issues.” He pointed to select companies in the speciality chemical segment or manufacturing and capital goods companies that have been penalised by the market due to short-term challenges. He believes their earnings growth will materialise over the next two to three years, presenting a valuable opportunity.

Also Read: Old Bridge’s Kenneth Andrade sees capex themes, pharma, and autos gaining strengthBanking and NBFCs remain a core overweight area for Roha Ventures. Sachdev described India as a “capital-starved economy,” which positions banking and financial services as growth businesses. He sees sustained credit growth in specialised financing areas such as home loans, commercial vehicle financing, gold loans, and small and medium enterprise (SME) financing. In a market where valuations are generally high, he believes this sector offers attractive opportunities. He advised investors to prefer companies in the mortgage lending business or those with stringent risk control measures.

Finally, Sachdev expressed a positive view on the auto sector, particularly the commercial vehicle (CV) space. “We are beginning to see a CV cycle on the uptrend,” he stated. He anticipates this upcycle will benefit a host of ancillary companies exposed to CVs, including tyre, forging, and axle manufacturers, alongside the original equipment manufacturers (OEMs) themselves. He also cited potential catalysts like replacement demand driven by new emission norms and the ongoing electric vehicle (EV) transition within the medium, heavy, and light commercial vehicle segments.

For the entire interview, watch the accompanying video

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