What is financial analysis, without a detailed explanation? Nothing. Any analysis, when seen in isolation, provides no answer to the target audience or clients. It has to be supported by research, the rationale behind the investment, sector update and finally the key takeaways and conclusion. In the research parlance, such reports are known as Financial Analysis report or more popularly Equity Research reports.
However, most of the retail investors already do their research before choosing a sector or stock. Then why is the equity research report so important? The answer to this is simple. In depth professional touch. Equity research reports are prepared by professional analysts who know what to present and how to present research oriented commentary in a coherent and concise manner.
The research reports are mainly for 3 kinds- (1) Initiation report (2) Sector Update (3) Annual/Quarterly Results Update
Most of these equity research reports are usually a 10-15 pages long report which contains various segments. Let’s take a look at the various integral components and try to understand the basics with examples in each case: