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 Anup
amongst the top equity fund managers.

☞ The monsoon this year has been normal, and there have been good showers across the country. What will
be the impact of this development for an agrarian economy like India?
India’s 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 expect
monetary 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. Given
the 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 expecting
never 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.