Equity Research is about studying equity or a stock, analyzing the trends, attractiveness of a stock, etc. Let’s understand what our experts have to say about the equity research, challenges faced in this profession, and what candidates should expect from this industry.
Expert interviews with Avinash Ghalke, a research expert reveals the following –
Interview with Avinash Ghalke, who shares his experience as an Equity Research analyst with top MNC Investment banks
Proschool: Please tell us about your background and qualifications
Avinash : I completed my PGDM in Finance from XLRI and prior to that, graduated in Computer Science Engineering. I cleared 3 levels of CFA (US) and earned the CFA charter in July 2010. I have worked with the Equity Research Teams at Goldman Sachs, Lehman Brothers and Nomura.
Proschool: Why did you decide to pursue ER?
Avinash : I was interested in equity markets and I figured out that research was the best channel for combining my interest and skills.
Proschool: How did you get into ER?
Avinash : My journey with ER began with Goldman Sachs, which was a campus offer. After a rigorous interview, I was selected for the Global Investment Research Team.
Proschool: A typical Day for an ER Associate/Analyst?
Avinash : A typical day starts with checking the news flow for the companies tracked through Bloomberg and other sources. If there is any news that impacts the companies it needs to be analyzed for impact on the company financials. The Sales team is informed and important clients are called to inform them about the likely impact of the news. There could be some report or a periodical note that needs to be published and work continues on that. On earnings day, things are a bit different. When the company reports its quarterly or yearly earnings, the numbers need to be updated in the model quickly and the first cut needs to go across to the Sales team and traders. Forecasts are later updated based on the actual reported earnings and the management’s commentary. An updated note is then published based on these changed estimates.
Proschool: High points in your ER career so far?
Avinash : High point of my career was when we initiated a BUY report on a company, contrary to the market opinion (most of the other Analysts had a SELL rating on the stock). After publishing the report, we also marketed the report to our clients. Over the next 1 week, the stock went up 25%, implying the market believed our hypothesis for the stock.
Proschool: Challenges faced?
Avinash : The main challenge for an ER Analyst is getting data. In order to make informed calls on the market, a lot of data needs to be crunched and the quality of data available is extremely important.
Proschool: Outlook for the industry?
Avinash : With the equity markets looking up once again, there will be a tremendous need for ER Analysts. As more investors start taking interest in the markets, the coverage of stocks has to increase, thereby needing more hands to take up the work.
Proschool: Career opportunities for ER aspirants in India (and elsewhere)?
Avinash : ER aspirants have options with both Buy and Sell side firms within India. With foreign funds setting up their dedicated research desks, ER Analysts can take up these roles as well. ER Analyst can also find fitment with numerous Private Equity and Venture funds that need expertise in MS – Excel model building and research.
Proschool: Word of advice for ER aspirants?
Avinash : Focus more on the role in the initial days than the money. Try to build a good foundation in the initial days and work under a good mentor. Before taking the plunge, make up your mind for a tough work schedule, extending to 16-18 hours occasionally.