For a third year in a row, Credit Suisse’s Amish Shah is the sector champion. The analyst covers eight stocks here and seven more across capital goods and conglomerates, earning points as “the voice of reason during periods of irrational exuberance,” in the words of one asset manager. In March 2012, reasoning that coal deficits would drag down profits despite limited government intervention and deeming their shares overvalued, Shah downgraded from neutral to underperform India’s largest independent power producer, Lanco Infratech of New Delhi, as well as its biggest private thermal and solar power generator, Ahmedabad-based Adani Power. By the middle of October 2013, their shares had plummeted 72.3 percent, to 5.70 rupees, and 53.8 percent, to 34.70 rupees, respectively. Over the same period the sector declined 22 percent. In a similarly bearish move, Shah initiated coverage of Ahmedabad-based Adani Enterprises, the country’s dominant private coal mining company, in November 2012 with an underperform rating, largely on doubts about the prospects for its new mine in Australia. Sure enough, Adani’s stock tumbled 26.7 percent, to 167.90 rupees, through mid-October, lagging the sector by 11.6 percentage points. “We continue to maintain our negative view on private sector power producers,” says Shah, 32, adding that capacity problems are “unlikely to get resolved soon” and that “profitability pressures” are likely to continue. — Ben Mattlin |
The 2013 All-India Research Team: Power, First: Amish Shah
