Compiling this year's list was hard for another reason: The sheer churn among analysts. CLSA's pharma analyst, Ajay Sharma, made it to the list, but couldn't be featured because he has quit the brokerage firm and is said to be joining a Japanese hedge fund. Another such analyst is Manish Jain, who quit Deutsche Bank and is said to have gotten out of equity research altogether. Ronnie Ganguly has moved from Citigroup to Deutsche Bank in Singapore, and Gurunath Mudlapur has quit his employer of 10 years, Khandwala Securities, to open his own research firm called Atherstone Institute of Research. "Brilliant opportunities and monetary gains have driven the analysts churn in the industry," says K. Sudarshan, Country Head, EMA Partners, an executive search firm.

Increasing sophistication of stock market instruments (think derivatives) and a spurt in the number of stock market participants (hedge funds, private equity firms) have boosted the demand for analysts. Sudarshan reckons that poaching will only increase over the next five years, as more institutional investors take a shine to d-Street-yes, even in these times.

SHIRISH RANE
34, Vice President
RESEARCH HOUSE: SSKI Securities
SECTORS: Power and Cement

Before they pick stocks in power, power equipment, cement or construction, most fund managers prefer to double-check their own intuition and assessment with that of another Dalal Street analyst. His name is Shirish Rane. That explains why Rane, a stock market soothsayer of 11 years, isn't just back on our list of best equity analysts for the second year in a row, but tops the charts with the most number of fund manager votes: Four. There are only two other analysts who managed three votes each, and the rest garnered two each (two was our cut-off for the best analysts). So what makes Rane, an MBA in finance from Mumbai's Jamnalal Bajaj, such a hotshot analyst? "Analytical ability is my best strength, and equity research was the best available platform that helped me to utilise the skill in the best possible way," he says, also explaining his choice of profession.

Rane, who was a code jock in his earlier avatar, was among the first analysts to spot stocks like acc, Gammon India, BHEL, HCC and Jaiprakash Industries ahead of the latest bull run. His favourite stock, however, is acc, which he spotted way back in 2000 at a price of Rs 90. Over the past six years, acc jumped 10 fold, but is currently quoting at Rs 730 per share.

A mix of top-down and bottom-up approach has been the strategy for Rane, who chooses stocks across all sizes, from mid-cap to small-cap. "I have no size bias. The stock has to have the ability to generate exponential returns for clients," he says. His only regret is his inability to cover more stocks, especially in real estate. "The entire hypothesis was in place as to why the (real estate) sector should do well, but due to a lack of time, I couldn't do it," says the man who still manages to squeeze time out for movies and books on astrology and philosophy. Coming back to his favourite beats, what does he think of the cement and power sectors? "If India's growth has to happen, then these sectors will see more growth than what they have seen till date," he says. We believe him.

-Mahesh Nayak

ABHAY LAIJAWALA
38, Director (Research)
RESEARCH HOUSE: Citigroup
SECTORS: Metal, Mining & Building Materials

Back in April 2002, when Abhay Laijawala gave a buy to the Tata Steel stock, many of his institutional clients were sceptical. The stock was quoting at Rs 80-90 and the steel boom, far off into the horizon. "The market realised the value of Tata Steel when iron ore prices went up sharply (in 2003)," recalls Laijawala, who has a master's degree in commerce from the University of Mumbai, and an MBA from the University of Rhode Island in the us. Tata Steel today trades upwards of Rs 500. "The super cycle in the commodity has just started. We have a buy on the stock, with a one-year price target of Rs 603 per share," says the man who remains unabashedly bullish about the lowest-cost steel producer in the world.

National Aluminium Company (Nalco) and acc are two other stocks that Laijawala zeroed in on much before they started climbing. But ask him about Gujarat Ambuja and Laijawala, whose first analyst job was at BZW in India, followed by I-banking stints at HSBC and DSP Merrill Lynch, squirms. Reason: He initiated his coverage with a hold at a price of Rs 140 in 2002. He was dead wrong. The stock continued to climb and then the Holcim deal happened early this year. "Expensive valuation was the key reason to initiate hold on the stock. But I think it was too early to do so," he says with a tinge of regret.

Yet, fund managers will testify, Laijawala knows the sector like the back of his hand (he has three votes from them, after all). After all, he's tracked it for 12 long years. So how does he spot the winning stocks? "Top-down approach has helped me make money for our clients," answers the Indian classical music buff. "With the metal sector being highly integrated, the objective is to constantly look at valuation comparison between Indian stocks and their global peers," he says. Laijawala notes that the stock markets have become vastly more dynamic than what they were 12 years ago when he started in the profession, but he believes that the basic rule of great stock-picking hasn't changed, and which is to stay focussed on the fundamentals. "The strong global commodity cycle will have a positive impact on valuations and Indian producers will be able to pass on the global pricing dynamics to the domestic markets," he says.

-Mahesh Nayak

ANAND SHAH
34, Vice President
RESEARCH HOUSE: I-Sec
SECTORS: FMCG

ICICI Securities, one of India's top brokerages, doesn't track liquor companies, tanneries and hatcheries. Know why? No, not because these are poor sectors to follow. It's simply that I-Sec's man in charge of the FMCG sector, Anand Shah, is a devout Jain and his religion forbids him from dealing with any of these items. If Shah, 34, can afford to put personal beliefs above professional demands, it's because he is, quite simply, the best FMCG analyst around. In the fickle world of stock-picking, not too many analysts manage to return to our list, but Shah has (he has three votes from fund managers). He was on our list last year, too. At I-Sec, he hasn't just kept his job, but risen from being a junior analyst six years ago to leading a sectoral team of two analysts, covering 20 stocks. "The mantra is to unlock value and generate money for our clients," quips Shah, who routinely gets roped in by his investment banking colleagues for structuring fund-raising deals, thanks to his ease with numbers.

Tata Tea and Godrej Consumers continue to remain Shah's best bets. He was early to identify the hidden value in the two stocks that have become multi-baggers. Last year, he identified Colgate-Palmolive at Rs 180, and today it trades at Rs 350 per share. The merit-ranked chartered accountant (he's done a stint at accounting firm Lovelock & Lewes, besides one of UTI's offshore funds) feels that the stock still has the potential to deliver over the longer term. "P-E re-rating is certainly over in most of the FMCG stocks, but the stock will rise according to the growth momentum in the company," says Shah, a regular at weekend satsangs (prayer meetings). He's also bullish about the sector, which he believes will clock higher profit margins due to the introduction of vat, tax breaks and strong consumer demand. ITC, GlaxoSmithKline Consumer, Emami and Eveready are some stocks that he says could double in the next two years. His one regret: Not recommending Hindustan Lever when it was at its low.

-Mahesh Nayak

ASHISH GUPTA
33, Analyst
RESEARCH HOUSE: CLSA
SECTORS: Automotive and Banking

Don't try telling Ashish Gupta that banking is a no-action sector. Because Gupta, who joined CLSA six years ago after beginning his career at IDBI as a project financier, knows that value in the sector doesn't only come from M&As. The booming retail market can throw up some stunning winners too. Like ICICI Bank, which he recommended way back in August 2003, when its stock was at Rs 156. Thanks in part to the three-year bull run and ICICI's aggressive growth, the stock today hovers around Rs 600. Gupta is as comfortable with his other beat, which is automotive. Fund managers remember his call on Bajaj Auto in May last year, when the stock was quoting at Rs 1,270. Bajaj has since more than doubled to Rs 3,000. "He argues out points that other analysts may have not even thought about," says a fund manager. Evidently, giving up project financing for equity research is another good call that Gupta made.

-Ahona Ghosh

SATISH JAIN
38, Senior Vice President
RESEARCH HOUSE: JM Morgan Stanley
SECTORS: Auto, Engineering and Aviation

Just how well do fund managers regard Satish Jain? Let's hear it from one of them. "While recommendations are not sacrosanct for (my fund), when it comes to Satish, we take note of it with greater sincerity," says this Mumbai-based fund manager. What makes Jain, an alumnus of IIM Bangalore, such a heavyweight among analysts? Apparently, it is his ability to weave a sharp analysis around a mountain-load of numbers. Jain, who couldn't be reached for this profile (he was away on vacation), hasn't always been an analyst. He started his career as an engineer with the Godrejs, took a B-school break and turned up at Bajaj Auto's corporate finance division, where he worked for three years. He made his debut in the research business with ask Raymond James, and arrived at JM Morgan Stanley four years ago.

-Shivani Lath

URMIK CHHAYA
36, Senior Analyst
RESEARCH HOUSE: Alchemy InSite
SECTORS: Cement, Engineering

On the day when the sensex came crashing down 826 points, we caught up with a rather composed Urmik Chhaya, nestled in his chair with a Leon Uris in hand. Pre-empting the obvious question, he says, "Bad day, but what can one do." Read something as gripping as Exodus perhaps? Tough situations are not new to Chhaya. In his 15 years of work, which he began as a trainee in the costing department of a plastic packaging company, Chhaya worked in various companies and sectors, including media, before succumbing to the call of equity research six years ago.

Chhaya has tracked the cement sector through his stints at HDFC Securities, Kotak Securities (in the private client group), Karvy and Anand Rathi Securities, and what's kept him ticking are good calls like Shree Cement and the not-so-good ones like Tata Power. "We recommended Shree Cement when it was at Rs 550 for a target of Rs 750, and then revised it to Rs 1,200. The stock more than doubled in three months," Chhaya says. On the sell call on Tata Power, something that didn't leave him particularly happy, he says, he didn't think the company's performance would improve. In fact, as he points out, it hasn't improved. Profits have remained virtually flat, but the stock has risen four times since he put the sell call on the company. "I think it has risen based on expectations, after the Electricity Act was passed," rationalises Chhaya.

It is the challenge of tracking a complex sector like cement that Chhaya really thrives on. "The fact that one has to predict demand, which has to be done region-wise, and track the impact of a huge number of variables on a company, makes the sector very interesting," he says, his hands drawing in the air all the permutations and combinations of freight and fuel, and rail and road exposure.

Chhaya is clear that the one quality a good research analyst needs is the ability to ask the right questions, "which determines the quality of analysis and the call on a company". He knew he had made the right call on his career when one of the best managed cement companies in the country offered him a job. And then again when his present boss, who was earlier a fund manager, offered him a job without an interview.

Shivani Lath

PAWAN NAHAR
30, Analyst
RESEARCH HOUSE: Kotak Securities (Institutional Equities)
SECTORS: Healthcare

There is something that the 30-year-old Pawan Nahar doesn't believe in, and that is getting too comfortable and biased. "It's easy to become biased when you track a company for so long. One must consciously look at things from a fresh perspective," says this MBA from Nirma Institute of Management, Ahmedabad, who has been covering the healthcare sector for five years now. Luckily for him, he says, things change every day in the industry.

Keeping his eyes peeled helped Nahar catch Cipla well ahead of the rally in the stock. He recommended the stock last year when it was around Rs 350. "Our theme was that the world is the market and that there is immense opportunity in the emerging markets, and that's exactly how it is playing out," he says of the stock that went up to Rs 700 (it's currently at Rs 227 after a bonus issue of 1:2.5).

The next big call he is going to make is on Ranbaxy's impending turnaround. "At the moment, the key problems are of the macro story...that generic prices are coming down, the company's high cost structures and the fact that they have not been receiving approvals in the us markets," says Nahar, who finds interacting with promoters, principal shareholders and investors, and understanding the intricacies of patents the most exciting part of his job. Going forward, reckons Nahar, the approvals and cost cuts will come for Ranbaxy, and new products will start flowing through the pipeline. "There is a clear understanding within the company that they need to cut costs. So it's just a matter of time," he says.

In Kotak for two years now, Nahar earlier worked with SSKI. In the two jobs, he's seen the healthcare landscape change. For one, says Nahar, investors are now focussing on emerging markets, instead of just the developed markets. About his approach and outlook for the sector, he points out that it has always been a bottom-up approach. "You have to identify and pick the stocks. But the generics market will continue to be under pressure and it's the larger companies that will benefit," he says, thinking aloud.

Talking about work comes easily to Nahar, but there is little he's willing to share about himself, except to say that he enjoys spending time with his family. Are there any misses that he's sore about? Indeed: Dr Reddy's. "It turned around and we could not catch that. I guess there were too many events that occurred," he says as a matter of fact. On Dalal Street, more than anyplace else, you win some and you lose some.

-Shivani Lath

ANIRUDHA DUTTA
40, Senior Analyst
RESEARCH HOUSE: CLSA
SECTORS: Mid-Cap

It takes an entrepreneur to understand another entrepreneur. Or some such thing should explain why Anirudha Dutta has been so successful at spotting mid-cap gems. Before Dutta, who featured on our list last year too, landed up at CLSA three years ago, he worked at India Infoline as one of the promoters. And prior to that, he was part of the business and strategy team at Tata Steel. Dutta's entrepreneurial streak and number-crunching skills, fund managers say, give him an edge when it comes to mid-cap stocks. Dutta gave Pantaloon Retail the thumbs up last year when the stock was at Rs 250 (he'd been tracking it for longer). Now, it's at Rs 1,650. Similarly, the IIT Kharagpur-XLRI grad put a buy on Bharat Electronics when it was trading at Rs 420, compared to Rs 1,182 today. Indian Hotels and Hotel Leela Venture are some other dark horses he spotted early on. Dutta has voted against a few stocks too. Jet Airways and Arvind Mills dropped off his list because he thought they were overvalued. After all, great investing isn't just about picking the right stocks, but also selling the wrong ones.

-Ahona Ghosh

SANJEEV PRASAD
37, Head (Research)
RESEARCH HOUSE: Kotak Securities (Institutional Equities)
SECTORS: Oil & Gas, Telecom, Chemicals and Media

For a man who's retained his slot on business Today's best analysts list for all of the past three years, Sanjeev Prasad remains a difficult customer to handle. Ask him for an interview and he says, "Print the same one you did last year, nothing much has changed." That's not entirely true. Last year, Prasad was Senior Analyst, but now he's the Head of Research. "Everything is the same, except for some additional managerial responsibilities," the man insists. Translation: Don't ask me about myself. Okay, let's talk about the markets. Where is the Sensex headed? "I wish I knew," comes the honest reply. "From these levels I am not too sure what the short-term upside is. Longer term, clearly, the market is headed up," says the IIT Delhi-IIM Calcutta grad. "But there will be bouts of volatility if we see a sustainable growth of 15 per cent, and then at some point the market will become expensive," he adds.

Prasad has spent a dozen years in research (10 of them at Kotak alone), but he still finds getting his arms around commodities challenging. "Some of the traditional valuation models that one follows are based on normalised earnings, normalised multiples," he explains. "Typically, one would give a low multiple at the peak of a cycle, but in a raging bull market like these days, you are seeing peak earnings and peak multiples. So there is a fair amount of overvaluation in certain stocks," he says. Prasad wouldn't list his best calls, but he's willing to talk about a big miss: Reliance Industries. "We were the first ones to identify Reliance in terms of value unlocking, but I guess we knocked it off too early. Surprised by the momentum of the market, I guess," says the man who is currently reading Khaled Hosseini's The Kite Runner. What Prasad is referring to is the unbundling of Reliance companies following the split between brothers Mukesh and Anil Ambani. Instead of dragging RIL's market value down, the split has created new wealth for its shareholders, thanks to the listing of erstwhile group companies such as Reliance Infocomm (under RCOVL).

While making money for the client is important, Prasad says that's not the only thing. The entire package of analysis and communication skills is important too. "It all boils down to what one delivers to the investor, whether or not you are making money for the client," says Prasad. In other words, you can be wrong once in a while, but you must always give it your best.

-Shivani Lath

HARRISH ZAVERI
36, Analyst
RESEARCH HOUSE: HSBC Securities
SECTORS: Consumer brands, Retail and Media

To Harrish Zaveri, there's only one recipe for being a successful analyst, and that is to know your sectors inside out and keep a close tab on them for trends. It's a recipe that's worked well for Zaveri (he's debuted on our list, after all) and his clients. Take Hindustan Lever, for example. Zaveri had been asking his clients to buy HLL since February this year before it began to trot up a month later in March. "We recommended a buy for both HLL (stock price has jumped from Rs 195 in February to Rs 225 now) and ITC (Rs 155 to Rs 174 in the same period) because we could see an upturn coming," says Zaveri. In the case of HLL, Zaveri saw high income levels this year driving consumer demand for its products. ITC, on the other hand, he notes, is capitalising on the opportunities presented by the growth in FMCG consumption in urban India. Zee Telefilms is another prescient call Zaveri made, but he'd rather not talk about it in detail since when he wrote his research report he was at Edelweiss Capital. He asked his clients to buy Zee when it was at Rs 130, compared to Rs 249 now. Zaveri joined HSBC only nine months ago, and prior to Edelweiss Capital he worked with Quantum and Parag Parikh Financial.

How does Zaveri react when his recommendations turn out to be wrong? "Keep the lessons with you as they can teach you a lot," he answers. Like most other analysts, the man keeps a 12-hour workday, but doesn't feel stressed about it. "I like the job I am doing," he quips. And when he isn't poring over stock data, he's reading about them just for pleasure. "I like reading books on investment," he says. His all-time favourite is Philip A. Fisher's Common Stocks and Uncommon Profits. This mixing of business with pleasure is surely one reason why Zaveri is a star analyst.

-Ahona Ghosh

HOW WE DID IT

So how did we put together the only listing of India's Best Equity Analysts? Actually, with some difficulty. For one, research houses were less keen than the previous two years to give us access to their star analysts. For another, fewer fund managers were willing to share their list of preferred analysts. But first, the mechanics of the survey: Like in the last two years, the survey was conducted among equity fund managers of top mutual funds in India, with minimum assets under management of Rs 1,000 crore. We approached 20 fund managers of whom 11 agreed to vote. The fund managers, who could be either the chief investment officer or the senior-most equity fund manager, were asked to nominate the five best equity analysts across research houses and sectors. To make it to our list this year, an analyst needed a minimum of two votes. There were 12 such analysts, but we could not include two of them (Ajay Sharma of CLSA and Manish Jain of Deutsche Securities) because they have since quit their firms. That's doubly unfortunate because it would have been a hat-trick for both of them. As a result, Kotak Securities' Sanjeev Prasad is the only analyst to have featured on all our three lists so far.

The churn among analysts has affected the fortunes of research houses too, but CLSA analysts got the most number of votes (see The Favourite List), followed by SSKI and Citigroup. In terms of sectors, pharma analysts got the maximum votes (nine), followed by capital goods & engineering, and FMCG. The least votes (one) went to mid-cap and diversified. We expect compiling the listing to get tougher the next year and the year after that. But, then, you wouldn't be reading us if you wanted the easy stuff, would you?

LAST YEAR'S BEST ANALYSTS
In a year of churn, not many analysts could retain their perch on our list.

Prabhat Awasthi
Brics Securities
He wasn't just on last year's list, but also the previous year's. Awasthi quit JP Morgan two years ago to set up Brics Securities with two of his colleagues. "The degree of freedom and the feeling of entrepreneurship are great," the IIT Kanpur and IIM Lucknow alumnus had told us last year. Awasthi tracks metals, auto and telecom sectors, and last year spent time trying to find some exciting mid-cap stocks.

Anirudha Dutta
CLSA
He's among the few analysts who've stayed put on our list this year. He entered our listing last year and this year got voted as the top mid-cap analyst. Among Dutta's most recent and best-known picks are Pantaloon Retail and Bharat Electronics, but last year he hit the bull's-eye with Rico Auto and Shree Cement.

Manish Jain
Ex-CLSA
Last year when Jain featured on our list, he was a top pharma analyst with Deutsche Securities. Thereafter he moved to CLSA, but BT learns that he has quit not just the research house, but equity research too. But Jain has always been a bit of a rolling stone. Most fund managers still remember him for the work he did at-no, not CLSA or Deutsche-but DSP Merrill Lynch, where he worked prior to joining the German financial giant.

Sanjeev Prasad
Kotak Securities
Like Dutta, Prasad is another analyst who has managed to maintain his reputation among fund managers and, hence, stay on our list for three years running. He continues to do a great job of picking winners in his chosen sectors of oil & gas, telecom, chemicals and media. The six-footer, an IIT Delhi-IIM Calcutta grad, is extremely media shy, letting on very little about himself.

Rajat Rajgarhia
Motilal Oswal
This value hunter dropped out of our list, but possibly for no fault of his. The sector that he covers, banking, hasn't really been hot with fund managers because it is still zealously regulated by the Reserve Bank of India and won't be open for M&As until 2009. But last year, fund managers thought he was bang on with UTI Bank and public sector major, Punjab National Bank.

Shirish Rane
SSKI Securities
On a slippery list where most analysts are more likely to fall than climb, Shirish Rane has managed to pull off a spectacular performance. From a middle-ranker last year, he's risen to the top on this year's list. Rane's sectors of watch: Power and cement. If you've read the preceding pages, you'll know that Rane was a code jock in his earlier profession.

Anand Shah
I-Sec
This hotshot FMCG analyst too stays put on our list for the second year in a row. What's his stock-picking mantra? Take a long-term view of stocks. That may seem an impossible thing to recommend to investors in search of quick returns, but Shah has more than proved that it pays to listen to him.

Ajay Sharma
Ex-CLSA
Sharma would have pulled off a hat-trick, except for the fact that this 30-year-old pharma analyst chose to give up last year a career in equity research for the thrill of hedge fund investing-a Japanese one at that, we are told. While at CLSA, Sharma wrote a popular pharma report entitled Attack of the Clones on the rise of Indian generic companies in the global market place.

Rahul Singh
Ex-SSKI Securities
His unconventional research techniques (once, to rough gauge mobile phone penetration in urban India he travelled in Mumbai's local trains), but strong number-crunching skills gave him a formidable reputation with fund managers. But this year, Singh, who recently quit SSKI, didn't manage to break into our top 10.

Jagdishwar Toppo
Enam Securities
Grasim and Hindalco were some of the stock picks that landed Toppo a place on our list last year. This computer engineer and IIM Calcutta alumnus has a simple strategy for identifying winners in the cyclical cement business: Buy stocks at the bottom of a cycle and sell them at the top. "One has to take a medium- to short-term view of industry cycles and arrive at valuations based on mid-cycle figures," he had told us last year.