Career In Equity Research In India: Essential Skills and Qualifications for Success

Career In Equity Research In India: How does a person decide if a stock is a good investment? Where does one acquire such skills to make such decisions? On what basis do brokers give buy/hold/sell ratings for various equities?

These are just some of the questions that ponder in the minds of market speculators and new investors, who are still beginning to understand the markets.

For those of you looking to make a career in equity research in India, this article is for you. In recent years, interest and participation in the Indian markets have skyrocketed. Just look at the earnings reports by Zerodha, India’s biggest discount broker. The billion-dollar startup reported sales revenue of ₹4,964 crores in a single financial year! (Live Mint) 

So what is it about the Indian markets that have appealed to so many investors and traders? Let’s understand, one by one, how you can also make your career in the markets, specifically in equity research.

What Is Equity Research?

Equity is the security issued by listed companies on registered stock exchanges. These securities are later bought and sold by investors and traders, with the sole goal of making profits. Equity Research is a career in studying and analyzing a listed company’s financials, ratios, forecasting, and industry analysis. Based on the findings of their analysis, firms give out BUY/SELL ratings on the stocks.

Usually, equity research analysts work on studying and observing a specific industry or sector. This accumulates experience and knowledge within that sector, making them industry specialists.

Educational Qualifications For A Career In Equity Research:

Equity research analysts work for both BUY and SELL side firms, and they require the same or similar qualifications and work experience. Here are some of the educational requirements for an individual interested in equity research:

1. Bachelor’s Degree in commerce, business & finance, or
2. Master’s Degree  
3. CFA Certification awarded by the CFA Institute
4.  NISM Certification

While it is not compulsory to have all the above-mentioned qualifications, it is helpful to have two or more qualifications to stand out among other candidates. Apart from the above-mentioned degrees and certificates, you also need to have certain skills and traits that can help you build a career in equity research in India. The important skills are:

1. Fundamental Analysis
2. Financial Modelling
3. Discounted cash flow (DCF)
4. Genuine interest and passion for financial markets
5. Research Reporting
6. Industry Analysis
7. Learning Important Financial Ratios
8. Company Valuation

How To Start A Career In Equity Research In India:

Once you attain the degrees and certifications mentioned above, you will be hired by different companies for entry-level equity research positions. Some of the firms that actively hire equity research analysts are:

1. Investment Banks
2. Asset Management Companies
3. Brokerage Firms
4. Investment Advisories
5. Specialized investment firms and
6. Insurance Companies

All the organizations mentioned above have both a buy side and a sell-side. Daily, here are the roles and responsibilities of an equity research analyst:

1. Research a specific industry and the securities within that industry.
2. Collect company data to provide accurate and data-backed recommendations.
3. Write research reports and publications that will be presented to shareholders and management.
4. Stay up to date with the latest news in finance, markets, stocks, and reports of an industry.
5. Use Financial Modeling and input data to create forecasts.

Also Read: How To Make A Career In Stock Market? – Jobs in Share Market

Interview Tips For Equity Research:

While going through the interview process for a role in equity research, the interviewer will ask you general questions initially to understand how well you know the industry, the markets, and how securities work and may even ask you to perform an on-spot analysis of a company to test your technical skills.

If you have experience in the markets, you can relate your work experience to the job in equity research as best you can. On the flip side, if you’re a fresher or changing industries to equity research, you can sign up for various courses online like Join Fingrad, and try to understand how the markets function.

This will not only build your knowledge for the interview, but it will also teach you how to invest and that is a skill that’ll stay with you forever, no matter what profession you choose.

A few technical questions that could be asked in the interview are:

1. How do you evaluate a company’s stock?
2. Describe a company that you think is a good investment and state the reasons behind your decision
3. What is the difference between market capitalization and market value?
4. Can you perform financial modelling?

In Closing:

You can choose a career in equity research in India if:

1. You are very passionate about stocks and markets.
2. Studying annual reports and corporate actions are interesting to you.
3. Want to make a career in investment banking, asset management, and investment-related services

Before you go ahead and start applying for jobs on different platforms, we recommend you build your base knowledge on various topics of investing. After all, the building is only as strong as its foundation. For more content on the markets, value investing, fundamental analysis, and more Join Fingrad!

Also Read: Build a Career in Finance: Top Stock Market Courses After Graduation In India

FAQ

1. What is the salary of India equity research?

The salary of equity research professionals in India varies, with an average annual salary of ₹7.7 Lakhs. The salary range typically falls between ₹2.3 Lakhs and ₹25.2 Lakhs.

2. What is the career path for equity research?

The career path for equity research typically involves starting as an Equity Research Associate and then progressing to a Senior Equity Research Associate, followed by an Equity Research Analyst or a Portfolio Manager position. One can also advance to a Sector Head or Director of Research role. Continuing education and obtaining relevant certifications, such as the CFA designation, can also aid in career advancement.

3. What certifications are required for equity research analysts?

While there are no specific certifications that are required for an Equity Research Analyst position, obtaining a Chartered Financial Analyst (CFA) designation can be beneficial in the field.

 Other certifications that can be helpful include;

1. Financial Risk Manager (FRM) 
2. Chartered Alternative Investment Analyst (CAIA) 
3. Financial Analysis

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