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

Ankit Agrawal, CFA

I possess investment research experience across asset classes and geographies, acquired at Investcorp (New York) and Howe & Rusling (Rochester). At Investcorp, an alternative asset manager, I was part of an investment team managing >$1bn in discretionary client assets. I was also a member of investment recommendation, monitoring, cross-asset strategy and macro outlook committees that met periodically for investment decisions and top-down views. At Howe & Rusling, a long-only asset manager, I helped cover US large-cap equity investments across sectors for growth and income focused portfolios as well as assisted in managing a US small-cap growth focused equity portfolio. I possess an MBA in finance and corporate accounting from University of Rochester in US, a CFA Charter, and an Engineering degree from Indian Institute of Technology Bombay in India.  

My current focus is L/S equity fundamental research across market cap and sectors with an eye on corporate governance and forensic accounting. I am currently based in India and my current coverage universe is biased towards India.

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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-602, Titanium Business Park, Makarba, Ahmedabad - 380051 |
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 L/S Analyst | Forensic Accounting | India

KPIT Tech: Earnings and Growth Visibility Remain Strong

KPIT Technologies: A Pure Play on Automotive Technology

<a href="https://www.smartkarma.com/entities/birlasoft-ltd" target="_blank" data-smartkarma-citation="entities:14709:1" rel="noopener">Kpit Technologies (KPIT IN)</a> [KPIT Tech] announced a new employee compensation scheme to drive employee retention and engagement and to offset some of the salary cuts done to cope with the current uncertain COVID times. It shifted its ESOP's exercise price determination from market-driven pricing to fixed pricing at face value (or more as determined by the Nomination &amp; Remuneration Committee [NRC]). This policy change is currently under the voting process and will be valid only if it receives a 3/4th majority approval from the shareholders.
<div class="content-highlight">
Below we provide a detailed analysis of the new ESOP policy by comparing it with that of the peer companies and by quantifying its potential impact on future earnings and cash flow. Historically, institutional investors have not perceived issuance of ESOPs at face value favorably. However, our analysis suggests that in this case, the policy change is pertinent and prudent as well as earnings and cash-flow accretive.
</div>
Insight Flow:
<ul>
<li>New vs Old Policy and Comparison to Peers</li>
<li>Rationale for New ESOP Policy</li>
<li>Economic and Accounting Impact of the Change</li>
<li>Voting Process</li>
<li>Conclusion</li>
</ul>

Kpit Technologies (KPIT IN) [KPIT Tech] announced a new employee compensation scheme to drive employee retention and engagement and to offset some of the salary cuts done to cope with the current uncertain COVID times. It shifted its ESOP's exercise price determination from market-driven pricing to fixed pricing at face value (or more as determined by the Nomination &amp; Remuneration Committee [NRC]). This policy change is currently under the voting process and will be valid only if it receives a 3/4th majority approval from the shareholders.

Below we provide a detailed analysis of the new ESOP policy by comparing it with that of the peer companies and by quantifying its potential impact on future earnings and cash flow. Historically, institutional investors have not perceived issuance of ESOPs at face value favorably. However, our analysis suggests that in this case, the policy change is pertinent and prudent as well as earnings and cash-flow accretive.

Insight Flow:

New vs Old Policy and Comparison to Peers
Rationale for New ESOP Policy
Economic and Accounting Impact of the Change
Voting Process
Conclusion


L&T Technology Services Limited (LTTS IN)

KPIT Tech: Analysis and Impact of the New Compensation Scheme