What is Equity Research?
Equity research is the study of companies from the perspective of investment. It involves much more than analysis of financial statements. It includes developing a deep understanding of how businesses work in general and how sectors and companies in those sectors work specifically combined with understanding with other aspects like people running the company, future prospects, valuations, etc.
Typical Day for an Equity Research Analyst
The day starts with going over the news and developments globally. This may be followed by a team meeting about stock market developments and areas to focus on. Here an analyst is expected to give their views on the companies / sectors under their coverage. This is followed by routine company research which includes reading annual reports, research reports, articles, interviews, presentations, con-calls, etc. about the company / sector. Analyst also creates and maintains the financial model of company financial statements. Analyst is also expected to routinely interact with company managements, industry experts and other company stakeholders to stay abreast with company performance. Apart from this routine research, analyst might visit company plants / offices to get more insight.
Is Equity Research right for you?
· Are you very curious about how businesses work around you?
· Do you have a critical and analytical mindset?
· Are you smitten with how stock prices rise and fall?
· Are you a voracious reader?
· Are you comfortable working with numbers?
If the answer to at least four of the above questions is ‘YES’, then Equity Research may be the right path for you.
Degrees that lead to Equity Research profiles
· Chartered Accountant
· MBA Finance from a Tier I or II college
Combination of any two or more of the above degrees is an added advantage.
Skills required to get into Equity Research profiles
Over and above the degrees, you require the following skills which are not covered in college/degree curriculum;
· Fundamental Analysis (Click here to learn Fundamental Analysis)
· Report Writing
· Financial Modelling and Valuations
Types of Firms that recruit for Equity Research Profiles
· Brokerages – Eg. Motilal Oswal, IIFL, Angel Broking, etc.
· Merchant Banks – Eg. Axis Capital, JM Financial
· Mutual Funds – Eg. HDFC Mutual Fund, Birla Sunlife Mutual Fund, etc
· PMS Firms – Eg. ASK Investment Managers, Enam, etc.
· Insurance Companies – Eg. Tata AIA, ICICI Prudential, etc.
· KPOs – Eg. Aranca, AMBA Research, etc.