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The 2014 All-India Research Team: Financials, No. 1: Aashish Agarwal

< The 2014 All-India Research TeamAashish AgarwalCLSAFirst-Place Appearances: 4

Total Appearances: 4

Analyst Debut: 2011

For a fourth year running, buy-siders deem CLSA’s Aashish Agarwal the best analyst covering India’s financials stocks. The sector rose 33 percent over the 12 months through late October, against the broad market’s advance of 24.3 percent, and the 36-year-old researcher is bullish on the group. He continues to single out the industry’s private sector banks as likely outperformers. The macroeconomic picture plays a part in his view, since Prime Minister Narendra Modi’s government — which assumed power in May — is considered proreform, which has led to an improved growth outlook that in turn has boosted the market in general, including banking shares. Another factor underpinning his optimism is the easing of corporate asset quality concerns, which accounts for Agarwal’s long-standing overweight positions on such lenders as Mumbai-based Axis Bank and ICICI Bank. “Large corporates have been trying to deleverage,” he explains. “As the cycle plays out, it will essentially lead to a rerating of the corporate lenders as concerns about default by their borrowers comes down significantly.” Over the 12 months through late October, Axis’ shares soared 75.5 percent, on a split-adjusted basis, to 423.75 rupees; while ICICI’s leaped 58.8 percent, to Rs1,571. During the same period, India’s largest retail bank, HDFC Bank of Mumbai — on which he has long been bullish — advanced 34.6 percent, to Rs893.65. Agarwal also is sticking with IndusInd Bank, a commercial services provider headquartered in Mumbai, noting that “they have done some good stuff on technology innovation, which has helped them to improve their client acquisition — and that has helped them to gain market share, in turn helping the stock.”


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