 
Prashant
Jain ANOOP
BHASKER RITESH
JAIN |
Value Driven A
valuation-intensive approach has helped Anup Maheshwari score 92
% He loves to swing the bat but with the markets on a roll, Anup Maheshwari, hasn’t had much of chance to practice his batting of late. His batting average in fund management though has been far better than what he manages on the field. At 92 per cent, Maheshwari, head of equities and corporate strategy at DSP Merrill Lynch, made it to the third spot in our rankings. If he’s had a fair bit of success with his stock-picking in the last decade, it’s probably because he is able to gauge when a fund manager can afford to overlook a few weaknesses in a company and take a call on the business and the management. In the normal course, Maheshwari would assess if the business was scalable with the chances of turning in above-average growth, the valuations reasonable with a sustainable Return on Equity and the management committed and communicative, to take a call on any stock. But once in a while, the soft-spoken fund manager, who started his career in the stock market with the UK-based Chescor, makes an exception as he did with Pantaloon Retail. “We couldn’t really visualise at the time that he (Kishore Biyani) would grow so big but we knew the retail business would do well and we were convinced that the person running the show knew exactly what he was doing,” he says adding that after a point the business potential and strong management can supercede some other factors. Maheshwari, who studied management at IIM Lucknow, believes that the person at the top can make a crucial difference to the way the business is fashioned and that this is especially true for categories such as public sector banks. With the better part of a diversified fund – around 60 per cent – comprising large cap stocks where the management is well established and there is little valuation arbitrage and therefore the assessment is mainly of the business, Maheshwari, works hard on the remaining 40 per cent of the fund which comprises mid-caps, to bring in that extra return that helps the scheme outperform. Among his better picks in mid-caps have been Matrix Laboratories and Amtek Auto which his fund was among the first to pick up. “We were impressed with Amtek’s aggression when they became the first company in the space to do an international acquisition and of course we believed the sector had potential,” says Maheshwari, who’s a voracious reader and enjoys both fiction and non-fiction. With DCM Shriram Consolidated – a conglomerate, more than the businesses it was the dirt cheap valuation that clinched the argument. Maheshwari continues to look for companies where the business can be scaled up and more important, where profits are at an inflexion point. Says he, “Increasing profits from Rs 50 crore to Rs 100 crore is a big thing, one can’t get there unless the business has reached a reasonable size. After that, it’s easier to grow, so we are on the look-out for such companies.” One of his big misses, he says, has been HDFC, but the bigger misses, he feels have been in stocks, where the exit happened too soon. The disciplined fund manager that he is, Maheshwari believes bench-marking the portfolio to an index, is very important because investors do want relative outperformance and dislike volatility. As
for the market, he is of the opinion that while it is not cheap,
there is growth and the growth is being rewarded. “It’s
not a combination that we always see,” he observes. Under the
circumstances, he feels that the market could continue to trend
upwards for some more time, possibly a year or perhaps two.
• HOME Business Standard • FUND MANAGER • October 2006 |
