Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.</li>
<li>One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.</li>
<li>Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.</li>
</ul>


Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice versa.
One spin-off should be added to the MidCap segment, while a bunch of recent listings will be added to the SmallCap segment.
Stock migrating upwards have outperformed stocks migrating downwards and we expect there could be some mean reversion from the middle of January.


AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>KPIT Technologies (KPIT) reported decent Q2FY23 earnings. Sales grew 8.3% QoQ and 27% YoY in Constant Currency (CC) terms. EBITDA and Net Profit grew 33% and 28% YoY, respectively. </li>
<li>Led by an all-time high order pipeline, <a href="https://www.smartkarma.com/entities/kpit-technologies-ltd" target="_blank" data-smartkarma-citation="entities:35189:1" rel="noopener">KPIT Technologies (KPITTECH IN)</a> gave a bullish outlook and upgraded its FY23 growth guidance. KPIT's Technica acquisition also looks very promising.</li>
<li>In terms of order pipeline, KPIT has a couple of mega deals ($100mm+) in the offing, which if realized, would be the first-ever in its history.</li>
</ul>


KPIT Technologies (KPIT) reported decent Q2FY23 earnings. Sales grew 8.3% QoQ and 27% YoY in Constant Currency (CC) terms. EBITDA and Net Profit grew 33% and 28% YoY, respectively. 
Led by an all-time high order pipeline, KPIT Technologies (KPITTECH IN) gave a bullish outlook and upgraded its FY23 growth guidance. KPIT's Technica acquisition also looks very promising.
In terms of order pipeline, KPIT has a couple of mega deals ($100mm+) in the offing, which if realized, would be the first-ever in its history.


KPIT: Strong Execution and Bullish Outlook

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ex US ETF / Technical Analysis

<ul>
<li>Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.</li>
<li>Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).</li>
<li>There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they <em>are</em> in downtrends, a major problem longer-term.</li>
</ul>


Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.
Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they are in downtrends, a major problem longer-term.


MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports -- Bounce Potential

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kpit-technologies-ltd" target="_blank" data-smartkarma-citation="entities:35189:1" rel="noopener">KPIT Technologies (KPITTECH IN)</a> ["KPIT Tech"; "KPIT"] reported a robust Q1FY23 earnings with CC revenue growth of 6% QoQ (26% annualized), well above the 18-21% guided for FY23.</li>
<li>The biggest positive surprise was on the margins front with EBITDA margins coming in at 19.4%, exceeding the 18-19% band guided for FY23, despite the supply-side headwinds.</li>
<li>More importantly, the demand outlook continues to be promising despite macro-economic concerns around US and Europe.</li>
</ul>



KPIT Technologies (KPITTECH IN) ["KPIT Tech"; "KPIT"] reported a robust Q1FY23 earnings with CC revenue growth of 6% QoQ (26% annualized), well above the 18-21% guided for FY23.
The biggest positive surprise was on the margins front with EBITDA margins coming in at 19.4%, exceeding the 18-19% band guided for FY23, despite the supply-side headwinds.
More importantly, the demand outlook continues to be promising despite macro-economic concerns around US and Europe.


KPIT Tech: Strong Execution; Margins Exceed Expectation

<ul>
<li>KPIT Tech reported strong Q4FY22 revenue growth (5%+ QoQ in constant currency [CC] terms). It also reported margin improvement, despite supply-side headwinds; with EBITDA margin at 18.6% vs 18.5% QoQ.</li>
<li>FY23 guidance came in optimistic with revenue growth expected to be in 18-21% range in CC terms and EBITDA margin projected to remain stable in the 18-19% range.</li>
<li>Demand environment continues to be robust with high visibility for growth. Q4FY22 total deal win was healthy at USD 200mm; including a large deal of Euro 70mm value.</li>
</ul>


KPIT Tech reported strong Q4FY22 revenue growth (5%+ QoQ in constant currency [CC] terms). It also reported margin improvement, despite supply-side headwinds; with EBITDA margin at 18.6% vs 18.5% QoQ.
FY23 guidance came in optimistic with revenue growth expected to be in 18-21% range in CC terms and EBITDA margin projected to remain stable in the 18-19% range.
Demand environment continues to be robust with high visibility for growth. Q4FY22 total deal win was healthy at USD 200mm; including a large deal of Euro 70mm value.


KPIT Tech: Robust Earnings and Strong Guidance

India

KPIT Technologies Limited operates as a technology company. The Company specializes in embedded software, artificial intelligence, and digital solutions. KPIT Technologies serves automobile industry worldwide.

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KPIT Technologies (KPITTECH IN)

AMFI Stock Reclassification Preview (Dec 2022): A Bunch of Migrations

Near the end of the review period, we see 7 stocks moving from MidCap to LargeCap, 6 from LargeCap to MidCap, 8 from SmallCap to MidCap and vice...

Brian Freitas

KPIT: Strong Execution and Bullish Outlook

KPIT upgraded its FY23 guidance across both revenues and profitability. Its recent acquisition of Technica adds significant capabilities. We...

Ankit Agrawal, CFA

MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports -- Bounce Potential

Bounce potential given $ACWX $EFA testing downtrend channel supports, but it would likely be a short-term trading opportunity due to the fact that...

Vermilion Research

KPIT Tech: Strong Execution; Margins Exceed Expectation

KPIT reported strong Q1FY23 earnings and is on track to deliver 30%+ earnings growth in FY23. As per our estimates, an investment in KPIT has...

Ankit Agrawal, CFA

KPIT Tech: Robust Earnings and Strong Guidance

KPIT reported strong Q4FY22 earnings in line with expectation. It also guided for a robust FY23 led by the strong demand environment and excellent...

Ankit Agrawal, CFA

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