8/8/2019 DSP Anup Maheshwari Questionnaire

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Straight from the Fund Manager

Anup Maheshwari - Anup has been working with DSP BlackRock since July 1997, and was

CIO at HSBC Asset Management between Dec 2005 and May 2006 before returning to DSPBR

AMC. Anup has obtained a Bachelor of Commerce degree from Sydenham College, Bombay

University, in 1991, followed by a Post Graduate Diploma in Management (PGDM) from the

Indian Instute of Management (IIM), Lucknow, in 1993. In May 2005, the Top Fund Managers

of India survey conducted by Business Today and mutualfundsindia.com, featured Anupamongst the top equity fund managers.

The monsoon this year has been normal, and there have been good showers across the country. What willbe the impact of this development for an agrarian economy like India?

Indias food inflaon has touched record highs recently. Following the good monsoon this year, there have already

been reports of increased output in crops such as rice. Increased agricultural producon should result in easing of

pressure on food prices, which will be evident once the harvest becomes available.

The RBI recently raised key rates again in its mid-quarter monetary policy review. How do you expectmonetary policy to pan out over the next six months?

Wholesale price inflaon has decreased in August compared to previous months. Inflaon would sll remain a prime

concern of the RBI and how the monetary policy pans out will depend on the extent to which the recent rate hike

helps contain inflaon.

The Sensex and the Nifty crossed 20,000 and 6,000 levels, respectively, in the third week of September. Giventhe recent corporate performance and GDP growth, do you feel these levels are justified?

Valuaons for the Sensex-30 stocks are currently at around 18.3X P/E (FY11) and around 15.4X P/E (FY12). These

valuaons appear to be relavely higher than the long term average P/E of 15.5X. But they are jusfied owing to the

fact that they are driven by strong underlying macro fundamentals, robust corporate earnings growth and connued

investor interest in Indian equies. So India remains a good long term buy and hold market with strong underlying

growth.

How would you expect markets to perform over the next one year, given projected corporate performance,GDP growth, investment demand, IPO flood and global cues?

Earnings growth for FY11 is currently esmated at around 25% (for the Sensex-30 companies) and at around 20% for

FY12. Domescally we do not foresee any risks to corporate earnings growth in FY11/ FY12. However external risks do

remain. If risk aversion were to increase globally due to connued economic weakness in the developed economies

or if sovereign credit issues begin to cause more investor concern, then it is possible that equies globally may face

negave senment.

What sectors are you positive on in the current scenario? Which sectors would you avoid?

We are posive on Financials (due to strong credit growth and improving asset quality), Infrastructure and Engineering(due to strong fundamentals such as increasing CAPEX plans for power, increased construcon of roads and other

urban infrastructure). We are underweight cement (due to oversupply and hence weakened prices) and telecom.

Many retail investors feel left out in the current stock market rally. The correction they were expectingnever happened. What is your advice for these investors waiting in the wings?

Many investors who tried to me the market were le in the sidelines. However, such an approach does not produce

good investment returns. We recommend a systemac long term approach where the investor tries to parcipate in

the underlying growth instead of trying to me the market for short term gains.

Given the way markets have risen, those who are fully invested are increasingly beginning to feel jittery.What is your advice for these retail investors?

Although it might seem like an over bought market at present, India is sll under represented in global porolios.

So there is a long term structural trend in favour of capital flows into India backed by companies having robust

fundamentals. Hence any jieriness is unwarranted as long as one is seeking long term returns from the Indian

market.