||Mr. Vikas Khemani, Executive Vice President & Co-Head Institutional Equities at Edelweiss Capital shares his experience of managing the Wholesale Capital Markets business at Edelweiss.|
Vikas Khemani is an Executive Vice President & Co-Head Institutional Equities at Edelweiss Capital. Prior to Edelweiss, he was working with ICICI Securities.
1. Can you please tell me about your job profile and what's your typical day's schedule?
I manage the Wholesale Capital Markets business which includes Institutional Equities and Investment Banking business.At a glance, my day or my job would be fourfold:Interacting with clients, essentially to understand their requirements and generate business; though not necessarily on day to day transactions, it is more to build relationships with clients and get frequent feedbacks. The second part is managing business which includes internal reviews, setting priorities right, assessing strategies, etc. The third part of my job is managing and mentoring people â€“ assisting colleagues to achieve their goals and guiding them to plan career paths. The last part of the job is the unplanned and unstructured ingredient â€“ including fire fighting or dealing with urgent matters.
2. What skills do you think are required to excel in your job?
Primarily, leadership skills, as people management is the critical element besides a thorough understanding of capital markets. In toto, itâ€™s a respectable combination of both. For me, itâ€™s an inseparable combination (of both).
3. What will you advice students or young professionals who want to be successful in the financial services industry?
Be passionate about what you do â€“ thatâ€™s the key. Any task deficient of passion to excel and succeed would be like a mundane clerical job that may merely take care of your monthly bills. I have seen many individuals in the capital markets, purely lured by the moolah that their friends or family members might have raked in. The truth is that you need a lot more passion in capital markets. There are no short cuts. Read more, read a lot â€“ thatâ€™s how most of successful investors/traders have accomplished themselves. At the end of the day, being passionate is central to your success.
4. There are people in the research who focus on specific industries and thus become knowledgeable in that industry. The sales teams on the other hand focus on portfolios containing different industries. For a beginner which in your opinion is a better place to start?
Of course, research. You deeply analyze an industry, be familiar with its nuances, understand the dynamics and learn modeling that reflects those dynamics. These are very important skills which you can apply later if you choose a role in sales. Research is about depth, sales is about width.
5. Since you talked about modeling, does modeling really work? A financial model for 5-6 quarters sometimes seems impractical when there is a big slip even in the expectation of 1 quarter. Does modeling and statistical projections really work?
It does. As you thoroughly understand the dynamics of an industry, you reach certain assumptions about different parameters of a company or sector. These assumptions are sheer derivatives of your deepening knowledge of the sector and reflections from your model, and never a straight, routine statistical extrapolation. Research is more about making macro and micro assumptions, exploring the rationale and assessing implications (of those assumptions).
6. How about the Analysis Beyond Consensus? Does analyzing past performance work, or the only thing that matters is the future projections?
There are many facets to valuing a company. Often mere financial projections do not provide a clear picture of a company. There are issues of corporate governance, transparency, etc. One has to ensure constantly that a company under review has a high degree of corporate governance. The only way to ensure is through a careful analysis of annual reports. Thus ABC is a very important function of valuation.
7. Where do you see the Indian economy heading after the recent rate hike by RBI?
Yes, the recent interest rate hikes have reduced the GDP growth expectations in the near term. But given the anemic growth around the globe, even a 7% growth looks good and I guess once we settle the current inflationary pressures, we will resume the 8-9% growth path. India will outperform global markets in the long term.
8. The brokerage business is very competitive with low margins. What is the future of a career in the brokerage industry?
These are business cycles â€“ we are going through a trough in the cycle and will be back on track when the capital markets recover. I believe the financial services industry continues to be a good career option, but as I mentioned earlier, your career choice should be driven by what you are passionate about.
9. India is seeing a lot of VC/PE activities. Does Edelweiss have any plans to become active in this area?
We are not active in the PE space. But we have a business around the Alternative Asset Management which offers a superior risk reward in the Indian context.
10. The developed world is experiencing several problems like huge debt in US and likely default in Greece. How do you think these events would affect the Indian stock market?
We have seen both the US credit rating downgrade and its aftermath. Developed economies have their problems of low growth and high debt and it will take them a while to recover. Indian markets will get impacted in line with other markets, but I think we will outperform if we can take care of our local issues.