< The 2014 All-India Research TeamM.B. MaheshKotak SecuritiesFirst-place appearances: 0

Total appearances: 1

Analyst debut: 2014M.B. Mahesh of Kotak Securities earns his first appearance on this roster, claiming second place. He maintains a cautiously optimistic view of India’s financials shares, which rose 30.8 percent year to date through late October, besting the domestic broad market by 9.3 percentage points. Caution is warranted, he believes, in the face of such unresolved issues as the quality of state-owned banks, which control over 70 percent of the domestic market and are “critical when the economic cycle shows an improvement,” says Mahesh. These institutions must focus on their long-term sustainability plans, he insists, and meet the Basel III capital requirements, as well as examine their lending decisions — which are often too concentrated in certain sectors. Even so, the researcher is upbeat because “we see headline improvement in macroeconomic data, and banks are operating in a stronger regulatory environment today,” he explains. He recommends that investors buy ICICI Bank, citing the Mumbai-based corporate lender’s “best-in-class” liability profile, with a negligible dependence on wholesale deposits and an emphasis on assets that managament intends to build over the long term. “A combination of low-cost deposits and low-risk lending implies that the return ratios can show further improvement and be at par with the leaders in the industry,” Mahesh advises.