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JUNE 3, 2007
 Cover Story
 BT Special
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Trillion-Dollar Club
India has joined the elite club of 12 countries with GDPs in excess of a trillion dollars. The country's GDP crossed the trillion-dollar mark for the first time when the rupee appreciated to below Rs 41 against the greenback. According to a report by Swiss investment bank Credit Suisse, India's stock market capitalisation has risen to $944 billion (Rs 39,64,800 crore), which is also closing in on the trillion-dollar mark. An analysis of the Indian economy.

Minding The Monsoon
The India Meteorological Department's prediction that the total rainfall in the coming monsoon season is likely to be 95 per cent of the long-period average, with an error margin of 5 per cent, is good news for agriculture. But experts say there's a need to revamp monsoon prediction so that the region-wise and timing of rainfall patterns can be forecast much earlier. A look at the credibility of monsoon models and their impact on agriculture.
More Net Specials

Business Today,  May 20, 2007

India's Best Equity Analysts
In the fickle world of Dalal Street, no one ever gets everything right all the time. But these men come close. Presenting our fourth annual survey of India's Best Equity Analysts.

When thousands of crores of rupees move in and out of stocks based on your recommendations, you must have the equanimity of a Zen master and the genius of Einstein. It's a tall order, but some men do better than most others. Men such as the ones featured in this annual listing of best equity analysts in the country. Voted onto our list by some of the biggest fund managers on Dalal Street, these men (yes, much to our dismay, all the analysts on the list are men) have a reputation for making some of the best picks. Sure, they've perhaps had their share of lemons, but more often than not, they pick winners. Who are these analysts and how do they do it? You'll find answers to the two questions on the five pages that follow.

38, Head (Research-Institutional Equities)
RESEARCH HOUSE: Kotak Securities
SECTORS: Media, oil & gas, telecom, chemicals

For Sanjeev Prasad, life hasn't changed much. he continues to be with Kotak Securities and the fund managers' favourite-four years in a row. And neither have things changed much for the BT reporter. The task of generating even a 300-word profile of Prasad continues to be a challenge-thanks to the man's shy and short replies.

Ask him what he thinks of media valuations, and the reply is a cryptic one-liner: "I do not understand media valuations. People are probably taking a long-term view." Media is just one of the sectors that Prasad tracks. The others are oil and gas, telecom, and chemicals. The IIT Delhi, IIM Calcutta (1994 batch)-grad, who says he landed up in equity research "by accident", has spent most of his working life at Kotak, where he heads a team of 22 analysts. "Compared to a few years ago, we have to look at a lot more sectors now. Earlier, it was just it, banking, pharma, FMCG, etc. That has changed," says Prasad. Ask him where he sees the markets going over the next one year, and he says, "My guess is that it would be 10-12 per cent up from current levels. Whenever you start discounting fiscal 2009 numbers, the market would be in the region of 15,500," he explains. "But this depends on when the 2008-09 numbers start getting discounted and that, in turn, would depend on the mood of the market."

What does the star analyst consider his best picks? ht Media and Gujarat State Petronet. And his big misses? Incredibly, Reliance Industries and the surge in telecom valuations.

35, Partner
SECTORS: Cement, power, construction and real estate

A listing of India's best equity analysts is never complete without this 35-year-old. Shirish Rane garnered as many votes as Prasad (that is, seven) from the 19 fund managers that BT polled, and made the cut for the third year in a row. Rane, who tracks sectors such as cement, power, construction and real estate, has been doing equity research for nearly seven years (five of them with SSKI) and, unlike Prasad, always wanted to be an equity analyst. So after a two-year stint with Rajan Raheja's Prism Cement and a year at CRISIL's debt rating division, this Jamnalal Bajaj post-grad (1996 batch) jumped headlong into equity research.

What was his best call in 2006-07? GMR Infrastructure, pat comes the answer. "When they came out with their IPO, people did not understand the airport infrastructure business. Take a look at the stock today." Indeed. It has almost doubled in the last one year. Rane is also happy about his calls on Unitech (up 200 per cent) and Jaiprakash Associates (100 per cent), though he says that the stock market has surprised him with its resilience in the face of spiralling inflation and rising interest rates. Talking specifically of the real estate sector, he says, "There will be a few ups and downs like what we've seen over the last year or so, but overall it's a positive story".

So, what, according to Rane, does it take to be a good equity analyst? Besides number-crunching and communication skills, business common sense-"something that's not so common", quips Rane.

34, VP (Equity Research)

In a world best known for its herd mentality, Jesal Shah is a contrarian. Back in July 2005, when almost every other analyst was battering Dr Reddy's Labs, Shah asked his clients to go 'overweight' on the stock-that is, give it more room in their portfolios. Those who did take his advice are laughing all their way to the bank. The Dr Reddy's stock has more than doubled since. Similarly, he was bearish on Cipla (in March 2006) when the D-street sentiment was exactly the opposite on the stock. If Shah has a better feel of pharma than other analysts it's because that's the only sector he's tracked in the 13 years he's been in the business. "What interests me the most about pharma is its sheer diversity of issues, ranging from legal and scientific to strategy and regulation," he says. His tip to pharma investors is to look for companies that manage growth well. If that sounds too complex, don't worry. Just keep an eye on Shah's research reports.

37, Analyst
RESEARCH HOUSE: Deutsche Securities
SECTORS: Capital goods, cement and utilities

Unassuming' is the word that comes to mind when you meet Manish Saxena. "I am happy if my stock calls prove right," he says with unaffected modesty. They usually do-at least, eventually. Like in the case of public sector giant bhel. Last December, when there was talk of Chinese competitors muscling into the capital goods industry in India, Saxena put out a buy on BHEL. For a while-actually, six weeks-it looked as if Saxena was wrong, when the stock started moving south after it lost the contract for Sasan ultra mega power project. But it has rebounded since, and is up 25 per cent in just five months. "I see a lot happening in the infrastructure sector, even as interest rates are moving upwards," says Saxena, who joined Deutsche Securities in June last year. "The sector will see a lot of capex coming on over the next few years."

It was a very different India when Saxena passed out of ICFAI Business School soon after the Asian crisis of 1997. "It was a tough period, and certainly not the best of times to pass out," says Saxena, especially if you wanted to make a career in equity research. So, Saxena took up a job with the Financial Express as a corporate analyst, although prior to his MBA he worked with Tata Steel for four years immediately after getting a degree in electrical engineering from Mumbai's VJTI. If there's one thing that Saxena has learnt over the years, it is to "make money for your clients. That will make them happy". You can't go wrong with a mantra like that.

37, Head (Equities & Research)
SECTORS: Media and auto

Three years ago, when Prabhat Awasthi gave up a well-established job at jp Morgan to join a start-up, it seemed like he was making a bad call. While an analyst's own reputation matters a lot, that of his research house matters as much if not more. Since then, though, Awasthi has built BRICS from scratch and turned into a well-regarded outfit with 13 offices in eight cities. "The fun in working with a start-up is amazing," says the Mumbai-based Awasthi. Investor trust is something he has earned the hard way over the years. An engineer and IIM Lucknow alumnus, Awasthi developed a taste for equity research while working for CRISIL back in 1994. He moved to SSKI two years later, where he saw the "lows in an economic cycle early on" and made a lot of sell calls in the metals sector, which was passing through a rough patch those days. Awasthi made a name for himself when he kept faith in Bharti Airtel even as it fell to Rs 20 after the initial listing. Soon, he switched to jm Morgan Stanley and then JP Morgan. "The stint at these brokerages offered me tremendous learning," he says.

Prabhat admires companies such as Reliance, Bharti and Infosys for their entrepreneurship and growth. "Indian companies are much more ambitious today," he says. In Awasthi's world view, growth equals good.

33, Vice President
RESEARCH HOUSE: Edelweiss Securities
SECTORS: Capital goods, construction and telecom

Warren Buffett fans would be scandalised, but Priyanko Panja thinks George Soros is a better investor. "I love the sheer confidence of Soros," explains Panja. "Buffett is too long term." A strong conviction in himself is a quality that has got Panja all the way from a small broking firm in Kolkata to Rashesh Shah's Edelweiss Capital in Mumbai. With degrees in cost accountancy and management, Panja was always interested in the ups and downs of Dalal Street, and has over the years covered sectors such as sugar, it, metals, telecommunications, and engineering. The companies he admires the most are Bharti Airtel, Reliance, ITC, and Infosys. He also sees a big future for engineering companies such as L&T. "We are paid for our conviction," says Panja, who is remembered by fund managers for his successful calls on L&T, Tulip Software, and Hindustan Construction in the recent past.

Yet, convincing his family, which has its own businesses, to let him take up a job as an analyst wasn't easy. But Panja fought to follow his own heart. "There's no short cut to success," says Panja, who scripted a 305-page report on infrastructure in April last year. Panja's career growth also reflects the trajectory of his research house. Edelweiss has been growing at 100 per cent every year for the last four, and now intends to scale up its asset management, equity capital and private client businesses. Panja is worried about the high churn in the business, but says he himself can't imagine doing anything other than divine stocks. "There are not too many jobs where you learn every day and yet get paid well," he says.

35, Director-India Asia-Pacific Equity Research
RESEARCH HOUSE: Citi Investment Research
SECTORS: Telecom, oil & gas

He's back. On our list of best analysts, that is. In 2005, when Rahul Singh debuted on our list, he was with SSKI. Now, he's with Citi Investment Research, but continues to cover his old favourites: telecom and oil & gas. "While the job largely remains the same, responsibilities and clients increase with time," he says. An alumnus of IIT Bombay (Class of 1993, rank 5) and IIM Lucknow (1995; rank 1), Singh's best pick to date has been Bharti Airtel, which he put a buy on when it was at Rs 20 back in January 2003. The stock now quotes upwards of Rs 800. What does he look for in stocks? "For me, it is the fundamentals of the company and the long-term outlook. I am not guided by news flows," he explains. But he hastens to add that one cannot ignore the short-term aspect, which means some calculated risks need to be taken. It's a fine line to walk. But Singh, obviously, is doing a good job of it.


Like in the previous three years, the survey was conducted among equity fund managers of top mutual fund houses in India, with minimum assets under management of Rs 1,000 crore. We approached 19 fund managers, who could be either the chief investment officer or the senior-most equity fund manager, and asked them to nominate the five best equity analysts across research houses and sectors. The poll was co-ordinated by BT's Mahesh Nayak. To make it to our list this year, an analyst needed a minimum of three votes. (Last year, the qualifying number was two, but this year we decided to increase it to three because there were 20 analysts who got 2 or more votes.) There were eight analysts who received 3 or more votes, but only seven could be featured because one of them-Sameer Baisiwala of Morgan Stanley-did not get his employer's permission to be profiled.

In terms of research houses, SSKI garnered the maximum number of votes (12), followed by Kotak Securities (11), and Citigroup (9). (see The Favourite List.) And in terms of sectors, telecom and oil & gas landed the maximum votes (15 each), followed by engineering (13), and infrastructure (11). Consumer durables, shipping & logistics, petrochem and diversified were sectors that received the least number of votes (1 each). Like last year, there was a high churn among analysts, and almost every research head said that demand for them far exceeds supply. Given that, Business Today is grateful to the research houses that so generously cooperated with us and gave us access to their star analysts. It is our fond hope that this listing won't just spotlight India's best equity analysts, but also lead to a healthy competition among them and raise the bar in equity research.


Shirish Rane
Mr Unshakeable, he topped our list last year with four votes, and
this year too stays on top with seven votes. He's been on our list for
three years now.

Abhay Laijawala
JP Morgan
The former Director of Research, Citigroup, doesn't figure on our list this year for a simple reason: He was in transition. He quit Citi sometime back and has just joined JP Morgan.

Ashish Gupta
"He argues out points that other analysts may have not even thought about," a fund manager told us last year. But stiff competition this year has meant that CLSA's automotive and banking analyst could not make it to our 2007 list.

Anand Shah
I-Sec's well-known FMCG analyst got two votes this year that was one short of the qualifying number this year. Don't blame him. Blame the sector.

Satish Jain
Morgan Stanley
Here's another well-regarded analyst (from Morgan Stanley) who did not make the cut this year.

Urmik Chhaya
Alchemy InSite
Alchemy InSite's cement and engineering analyst has been overshadowed this year by some new names. But don't write him off, yet.

Pawan Nahar
Kotak Securities
Last year, this pharma analyst at Kotak was bullish on Ranbaxy; unfortunately, investors are still wary of the stock, although it's an excellent long-term bet.

Anirudha Dutta
It's tough when you are a mid-cap analyst like Dutta. It's hard to spot the next Infosys or Reliance, but that's something fund managers, who did not vote strongly enough to put Dutta on our list this year, expect.

Sanjeev Prasad
Kotak Securities
Here's a man whose star is in the ascendant. Compared to two votes last year, Prasad walked away with seven to tie with Shirish Rane.

Harrish Zaveri
Deutsche Equities
His is still a voice you cannot ignore, but our raising the bar this year seems to have hurt chances of this consumer brands/retail/media analyst at Deutsche Equities.