Boost Your Research Report Understanding: Breakdown of 5 Key Metrics

Fri May 17, 2024

a) Price & Volume Chart: Initially, the 1 or 5-year graph of the stock is displayed for the growth rate quaterwise with a short summary of what were the crucial event occurred during the fiscal.

b) Peer analysis: Direct & indirect competitors are listed rank-wise. However, newly created sectors or monopoly markets like IRCTC show the least comparison. The comparison is based on fundamental & valuation-wise analysis (net margin, interest coverage, dividend coverage, interest funding, accruals, and operating cash yield) to choose the winning one.

c) Earnings Breakdown: Here the same comparison continues with highlighting future target price, initiatives co. gonna take for a Jcurve, earnings per share & how near the mean, high & low is with a few estimations as per the analysts.

d) Fluctuations in Valuation: Analysts consider different valuation methods and try to match the S&P BSE SENSEX index. A few highlights are provided on the share price movements in the last 5 years and at how much discount the industry is running.

e) Risk Analysis: What are the risk factors associated, how much volatility the stock is facing, measuring the correlation with the peers and a short summary of how many shocks it faced in the last few fiscal. Measurement of outperformance and exceeding fluctuations beyond estimations are also considered here.

Note: Research analysts provide in-depth reports with an unbiased view of the stock to not influence/force the investor in any way.

What's for NISM Students?

a) Research reports are a collective view of research analysts, giving all the perspectives to see towards a co. The more reports you read, the broader you can think of the company's financials and future trends.

b) Even a non-commerce student can start reading basic short reports that are easy to grab and apply in your financial career

c) For more advanced reports, the company's financial statements on their official website are the best source to get a comprehensive idea of the sector & co. position.

Here are some qualities of a good research report:

a) Simple to understand with a clear financial breakdown

b) Not too much jargon of different financial terms

c) Considered varied companies giving a basic understanding of all the sectors to students & professionals

How old the research reports should be?

Not more than 1 year as many legal & managerial changes are happening each fiscal year. So just after the wrapping up of each fiscal between April & May is the best source for study.

Prof. Sheetal Kunder

SEBI® Research Analyst. Registration No. INH000013800 M.Com, M.Phil, B.Ed, PGDFM, Teaching Diploma (in Accounting & Finance) from Cambridge International Examination, UK. Various NISM Certification Holders. Ex- BSE Institute Faculty. 16 years of extensive experience in Accounting & Finance. Faculty Development Programs and Management Development Programs at the PAN India level to create awareness about the emerging trends in the Indian Capital Market and counsel hundreds of students in career choices in the finance area.

Boost Your Research Report Understanding: Breakdown of 5 Key Metrics

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