An Equity Research Analyst has to study stock behavior and guide the client towards building a portfolio that is congruent towards their financial goals and objectives. They’ve to remain updated with the latest trending information about any particular stock and give relevant advice to the clients about the same. Thus, the job profile of an Equity Research Analyst is quite challenging indeed, and requires someone with all-round skills: be it technical, people management or communication skills, since he has to deal with layman clients who might be ignorant with the nuances of stock market.
At the entry level, candidates join as Associates. Typically they have MBAs in finance or are CAs
- Typically the ER division is split into different coverage groups, each coverage group focuses on a specific industry sector. So, Associates will be allocated a particular sector and some companies within that sector.
- Associates assist Analysts in publishing reports. The major chunk of work involves research on the general economy, the sector and the companies in question. For this, they may directly contact companies or use secondary data sources (internet or other public sources). They have to constantly keep up with the news and events in their sector. Once the data is gathered, detailed financial models are constructed to come up with company valuations.
- Every quarter, once the earnings of a company are released, the ER team publishes reports on the company. Apart from this, any new development in the sector or a company may require a separate report to be published. When a new company is going to get analyzed for the first time, the team publishes an ‘Initiating Coverage’ report, which is much more extensive than the usual report, as it analyzes the macroeconomic conditions, sector, competitors, and the company itself in thorough detail.
- The hierarchy is quite flat. After spending adequate number of years as an Associate and developing the required industry expertise, one can become an Analyst and publish reports in his /her own name. As this point corporate access (or networking with the top guns in different companies) becomes more and more important
Companies to target:
- Notable International names: Goldman Sachs, JP Morgan, Morgan Stanley, UBS, Nomura, Barclays, Deutsche Bank, Credit Suisse, Citi, Bank of America Merrill Lynch, HSBC, Standard Chartered.
- Notable Indian names: Kotak Mahindra, ICICI Securities,Yes Bank, Avendus, HDFC, SBI Capital, Edelweiss