Equity Research Workshop Session 1

8/8/2019 Equity Research Workshop Session 1

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Equity Research Workshop


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Outcome of the Session Course

By the end of the course the participant will be Skilled in:

Handling Microsoft Excel efficiently & Effectively

Industry Analysis

Economic Factor Analysis

Company Analysis

Advanced Financial Statement Analysis

Factoring in Rationale Assumptions

Building financial models

Implementing Discounted Cash Flow Models

Building rational investment thesis

Report writing

Client Interaction

Empowering People Transforming Businesses3


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Session wise Outcome


Session Outcome

Session 1 -Getting a broader view of Equity Research

-Brushing up the basics

- Economic Factor Analysis

- Industry Analysis

Session 2 -Handling Microsoft Excel Efficiently & Effectively

-Company Analysis

Session 3 - Advanced Financial Statement Analysis

- Factoring in Rational Assumption

Session 4 - Factoring in Rational Assumption

- Building Financial Models

Session 5 - Learning & Implementing Various Valuation Techniques

Session 6 - Building rational investment thesis- Report writing

- Client Interaction


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Session 1



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Outcome of Session 1

Participants will be skilled in:

Getting a broader view of Equity Research

Brushing up the basics

Economic Factor Analysis Industry Analysis



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Prerequisite

To get the most out of the sessions: Participate in the discussion

Do the assignments religiously

Raise your hand if you have a question. Depending upon the time, you

will get an opportunity to ask a question. Or else it will be answered atthe end of the session.

During the concept delivery, if you have any question, please note it

on the notepad.

Sharing anything & everything that is coming in your way of fulfilling

that you are up to fulfilling

Not holding back anything with you. Share it with me and/ or with

your mentor.

Do not be afraid to ask a question.



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Prerequisite

To get the most out of the sessions:

Let us know immediately if something is not working for

you.

Mentoring is not optional.

Do not miss any of the sessions. Please be unreasonable toattend each & every session.

What you get is what you are looking for!

Many of you may be looking for getting some notes,

reference material. You will get that, but its a workshop!

Equity Research will happen here, in the classroom!! So no

attention on going back and understanding it later through

notes.



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Prerequisite

Please make sure that your cell phones are on silent mode.

I hope you have already conveyed it your kith-n-kin about

your participation in the workshop. Only pick up the

urgent calls by stepping outside the classroom.

Please return your name tags at the end of the session.

Most Important, You must Enjoy the Session!



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Questions and Queries, if any?



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Mentoring Structure

You will be allotted mentors in a while & you will be part of a group along

with the mentor.

Next 15-20 minutes, you will interact with the mentors.

In that interaction, please fix up the timings that are suitable for you to

interact with the mentors.

Please keep the mentoring call timings fixed as much as possible.

Participant needs to call the mentor.

Also, please give your respective mentor your expectations from the

session in the sheet that will be provided to you.

Please exchange the phone numbers.



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What Equity Research is ALL

About?



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What Equity Research is ALL About?

Financial Statement Analysis

Economy Analysis

Industry Analysis

Company Analysis

Financial Statement Analysis

Valuation

Recommendations

Fat Salaries



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What Equity Research is ALL About?

Management interactions

Lot of work in Core Finance

Analyst Meets

Investment World

Fascination

Money; Wealth

Excitement



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Equity Research Demo



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Demo

Infosys

We have a Buy recommendation on Infosys and have set a

target price of Rs3,536 indicating an upside of 26% from

current level.

Our Buy for Infosys is driven by

We expect a strong recovery in the US economy leading release of

IT budgets from the US clients in turn leading to revenue growth of

37% (rupee term) and EPS growth of 25%.

Further scope for maintaining EBIDTA margins given multiple

levers like lower utilization rates, scale benefits, onsite-offshoremix, employee mix, etc.

Clear indication of improvement in the billing rates & increasing

mix of high end consulting work



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Demo

Our Buy for Infosys is driven by We have estimated Infosys FY11 EPS of Rs136 indicating a YoY

growth of 25%.

We expect RoE to improve base on better employee utilization &

billing rates leading to improving revenue productivity, although

higher tax rates offset that effect slightly.

Currently, Infosys is trading at 20x our FY11E EPS. This valuation,

we believe is lower compared to its peers that are trading in the

range of 23-27x their 1 year forward EPS. And hence we have

valued Infosys at 26x its FY11E EPS of Rs136 setting the target

price of Rs3,536

What have we factored in: Employee addition of 30,000 for next year

Utilization rates moving up from 72% to 75%

Billing rates up by 2%Empowering People Transforming Businesses18


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Demo

What have we factored in:

EBIDTA margins stable 32.5%

USDINR rate of Rs48 (depreciation of 2.2%)

Capital Expenditure of Rs12,000 mn

Tax rates of 22% (as the STPIs will come out of tax free

period)

Equity dilution of 0.3% on conversion of ESOPs

Interest on other income going up as cash is expected

to go up due to improving collection period



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Demo

Revenue Driver

Strong employee addition of 30,000

Improving utilization rates

Increase in the billing rates

US and European economies are improving and

spending on software is expected to increase.

Company management has said that the clients are

quite optimistic about the quick budget releases and

expect new projects to flow in as well. US financial markets have shown early signs of

recovery.



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Demo

EBIDTA Margin Drivers Higher utilization rates leading to higher revenue at the same costs

Better billing rates

Hiring about 70% of freshers of the total 30,000

Hiring includes non-IT graduates that come at relatively cheapercosts with equivalent skills

Increasing proportion of consulting business to bring in higher

margins

Fixed costs projects increasing. Fixed cost projects typically show

higher profitability.

Planning to increase the offshore employee by 2% leading tobetter margins



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Demo

Valuation

We valued Infosys by using two methods:

Relative valuation

Relative Valuation P/E(FY11) = Payout ratio(h) *(1+gh)*

(1- ((1+gh)/(1+keh))^n)/ (keh-gh) +

Payout ratio(n)/ (Ken-gn)*1/(1+Ken)^n

Ke Cost of Equity

Gh: Growth rate



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Demo

Relative Valuation

We have factored in High growth rate of 25%

Stable growth rate of 5%

Beta High growth: 1.1

Beta Stable growth: 0.7

Market premium of 8%

Rfr of 7.5%

P/E (FY11) = 26

And hence we have valued Infosys at 26x its FY11

EPS of Rs136.



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Demo

Risks to our call

US & European markets can go in double deep

recession and the revenue growth could be

adversely impacted. INR may appreciate due unforeseen reasons and

can impact the revenues adversely

Loss of key clients



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So what is equity research

really about? Identifying Undervalued stocks

Timing

Being ready to stand in uncertainty

Knowing your clients requirements

Being creative

Asking right questions, at right time to

right people

Building a distinct view and doing good enough work forhaving conviction about your view


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What it demands from you?

Lot of reading across the spectrum

Lot of interaction with the

companies, their clients, theiremployees etc.

Rigorous work on model making,valuations

A lot of client interaction


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Analysis



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Analysis

We will be using this word a lot through out our discussion.

So, let me tell you what it means by doing Analysis

Analyze what?

Industry

Economy Company

Market share

Company Management

Risk

Business Projects

Share price, volume, pricing etc. etc. etc.



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Analysis

What does it mean by doing analysis?

Reading through the economic, company, industry, annual reports

Talking to company management

Reading about the competitors

Trying to identify the connections between different things that are

happening around

Doing a sample survey

Testing/ tasting the products

Observing the share prices; noting the

Noting the data

Arriving at conclusions

Collecting enough data to build the argument



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Analysis

What will you be left with after doing analysis

Understand new terms & terminologies

Trend

Declining

Increasing Cyclical

Whimsical/ no trend

Insights: You may have some insights about the functional,

technical aspects of the business, industry.

Charts, sensitivity tables, etc.

Conclusions



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Analysis

Three time periods where you can analyze:

Historical State Analysis

Current State Analysis

Future Expectations Analysis

Till the time we do not talk of analyzing the future

prospects of the company, we will broadly talk

about the historical & current state analysis



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Analysis

What is most important is you build your view

about anything & every thing you see and

observe.



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Analysis

Pitfall 1: Tunnels in Research

By the way, Analysis is never going to end.

So, what is most important is that always keep

your analysis: Focused

Time Bound

Or else, you will keep moving in different

tunnels without knowing how much is actuallygetting done.



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Analysis

Pit Fall 1: Tunnels in Research

IT Sector

Telecom Domain

VAS

VOIP

GPRS

Logistics Sector

Reliance to invest into Deccan

Aviation Sector

Indian Airlines to break even by 2015



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Analysis

Handling it All?



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Our Approach to Work

Understand the basic Concept

Understand the terminologies

Understand in depths (Focused & Time

Bound)

Apply to the real life



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Data Collection

Never go for collecting all the data right from the

start.

First focus on the understanding of the concepts and

then collect the data that is required.

There is huge data available out there; you must be

clear and choosy right from the beginning about the

data collection. Because, in the end, you would have

ended up analyzing unwanted, non-relevant, data

resulting into no concrete outcome & time runningout of hands.



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Be-Do-Have



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Groups

Bulls

Bears

Special Gift for the winner group at the end of

every session



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Where are we Stand?

We got the overview of:

Session prerequisite

We got the mentors with a small mentoring

session what it takes to be Equity Research Analyst

We got broader Equity markets

After this break and before lunch, we will brush up

the fundamentals and get grounded in the basicconcepts of finance.



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After the Break 1

We got the overview of:

Session prerequisite

We got the mentors with a small mentoring

session what it takes to be Equity Research Analyst

We got broader view on the Equity markets

Now, we will brush up the fundamentals and get

grounded in the basic concepts of finance.



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Profit & Loss Account


Getting Grounded


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Balance Sheet


Getting Grounded


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Cash Flow Statement


Getting Grounded


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Time Value of Money


Getting Grounded


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Where are we Stand?

Post the 1st Break, we have covered the basic

concepts of reading:

Profit & Loss Account

Balance Sheet

Cash Flow Statements

Time Value of Money

After this break, we will look at Economic Factor

Analysis; where in we will see at how different

economic factors affect the equity analysis.



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Global Economy

Domestic Macro economy

Demand & Supply Shocks

Government Policy

Business Cycles



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Let us understand how it emerged in the first

place.



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Global Economy

The top-down analysis of a firms prospects must

start with the global economy. The international

economy may affect the firms export business,

the price competition it faces from its competitors

or the profits it makes on the investment abroad.

Certainly, there is a considerable variation in

economic performance across the countries.


E i F t A l i


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Economic Factor Analysis Global Economy


Stock Market ReturnsGrowth in Real GDP Local Currency $ Terms

China 11.2 -7.6 -7.6

Hog Kong 3.3 -20.0 -20.0

India 5.8 -0.1 +1.0

Indonesia 3.8 1.4 18.7

Singapore 3.0 -20.7 -15.6

South Korea 5.8 -14.9 -5.7

Taiwan 4.2 -19.7 -19.1

Venezuela -16.7 24.0 -41.2

Argentina -10.1 98.3 -37.5South Africa 3.0 -20.7 19.5

Russia 4.3 50.9 45.7


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Global Economy


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Global Economy


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Global Economy Chart of Infosys, Nifty and Nasdaq


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Infy_Close Nifty _Close Nasdaq_Close


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Global Economy

Political Risk

We all remember what happened in 2003 to the stock

markets when BJP lost Loksabha election to congress

on 16th May.

In 1997, the Hongkong market extremely sensitive to

the political developments leading up to transfer of

governance to China.

Iraq war

Etc.



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Global Economy

Exchange rate: The exchange rate is the rate at

which the domestic currency can be converted

into a foreign currency.

Currency Appreciation: Good for importers/Bad

for exporters

Currency Depreciation: Good for exporters/ bad

for importers



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If GBP depreciates against USD & USD

appreciates against INR, what will happen to

exchange rate between GBPINR?

INR will_______________ against GBP



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Domestic Macro Economy

The macro economy is the environment in which

all the firms operate.

The price-earnings ratio vary with the factors suchas interest rates, risk, inflation rates, and other

variables.



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Domestic macro economy GDP: It is a measure of economys total

production of goods & services

Industrial Production: Another measure is the

Industrial Production. It is more focused on themanufacturing side of the economy.

Employment: Unemployment rate is a percentage

of total labor force (i.e. either who are working or

actively seeking employment) yet to find work. It

basically tells the extent to which the economy is

working to its fullest capacity.



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Inflation: It is a rate at which a general level of

prices is rising. High rates of inflation are generally

related to over heated economies. Here, the

demand for goods & services is outstripping the

productive capacity.

The unemployment vs inflation dilemma



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Domestic Macro Economy Interest Rates: Higher interest rates reduce the

present value of the future cash flows, there by

reducing the attractiveness of the investment

opportunity. Moreover, higher interest rates arealso disincentive for the corporate as they will

hesitate to borrow at higher cost (even for

expansion)

Moreover, demand for housing, durable goods,

vehicles, etc. is also sensitive to the interest rates

fluctuations.



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Budget Deficit: The budget deficit of the

government is the difference between government

spending and revenues. Any budgetary shortfall

must be offset by government borrowing. Large

amounts of government borrowing can force up the

interest rates by increasing the total demand for

credit in the economy. This can also lead to

crowding out effect leading to higher interest ratesand chocking off business investments.



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A demand shock is an event which affects the

demand for goods and services in the economy.

Example for positive demand shock are reduction

in taxes, increase in money supply, increase in

government spending, or increase in foreign

export demand.

Demand shocks are usually characterised by

aggregate output moving in the same direction as

that of interest rates & inflation.



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Demand & Supply Shocks A supply shock is an event that influences the

production capacity and cots.

supply shock is usually characterized by aggregate

output moving in opposite direction of inflationand interest rates.

Where can you use this analysis?

If there is an indication of tightening of money supply,

you might want to avoid industries such as automobileproducers because it will be affected due to increase in

interest rates.



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Government Policies

Government has two broader tools those that

affect the demand for goods and services and

those that affect the supply.

Recently, most of the focus has been on demand

side of the story

The focus has been on government spending, tax

levels, and monetary policy.



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Government Policies Fiscal Policy

It refers to the governments spending and tax actions

and is part of demand-side management. Fiscal policy

is probably the most direct way to stimulate or slow theeconomy.

Increases in the govt spending inflate the demand of

goods & services & vice-a-versa.

Similarly, increases in taxes implies deflate in the

demand of the goods & services. However, the execution of the fiscal policies is rather

very slow.



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Government Policies

Monetary Policy It refers to the manipulation of money supply to affect the macro

economy. It typically works through its impact on the interest

rates, ultimately increasing the consumption & demand. Increase in money supply will reduce the short term interest rates

and will increase the consumption & demand. Over long period,

however, higher money supply only leads to higher price levels and

does not have any permanent impact on the economic activity.

And it becomes a difficult balancing act. Thus, stimulation/

inflation trade-off is implicit. Open Market Operations: The Govt. buys & sells securities

increasing or decreasing the supply of money in the economy.



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Government Policies

While the Fiscal Policies are more direct in nature,

it takes longer to implement.

Impact of Monetary policies is more of a round

about and works largely through its impact on

interest rates.



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Concept Check Question 2

Suppose the government wants to stimulate the economy

without increasing interest rates. What combination of

fiscal and monetary policy might accomplish this goal?



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Government Policies

Supply Side Policies

The supply side policies treat the issue of the

productive capacity of the economy. The goal is to

create an environment in which workers and owners ofcapital have the maximum incentive and ability to

produce and develop goods.



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Large tax cuts were followed by rapid growth in GDP. How

would demand-side and supply-side economists differ in

their interpretations of this phenomenon?



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Business Cycles

The economy recurrently experiences periods of expansion

and contraction, although the length & depth can be

irregular.

This recurring pattern of recession & recovery is called asBusiness Cycles.

A Peak is the transition that occurs at the end of the

expansion and lasts till the start of the contraction.

A Trough occurs at the bottom of a recession just as the

economy enters a recovery.



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Business Cycles

Cyclical Industries:

As the economy passes through the different stages of the

business cycles, the relative performance of the industries is

expected to vary.

At the trough, when the economy just begins to recover, the

industries that are sensitive to economic recovery, like Auto, would

tend to outperform. E.g. Automobiles, durable goods industries.

Because purchase of such goods can be deferred during recession,

the sales of such industries are sensitive to the macroeconomic

conditions.



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Business Cycles

Cyclical Industries:

Other cyclical industries are the producers of the capital goods i.e.

the goods used by other firms to produce their products. When

the demand is slack, few companies will be expanding and

purchasing capital goods. So, the capital goods industry bears the

burnt of the economic slow down but does well in expansion.

Defensive Industries:

These are the industries that are least sensitive to the economic

cycles. These industries include food producers & processors,

pharmaceuticals and public utilities. These industries willoutperform at the time of recession.



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Economic Indicators

Leading Indicators

Coincident Indicators

Lagging Indicators



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Where are we Stand?

Post the 2nd Break, we have covered Economic Factor

Analysis:

Global Economy



Government Policy

Business Cycles

After this break, we will look at Industry Analysis and why &

how it is important from the perspective of Equity Analysisand further finer aspects of the same.



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After the Short Break 2

Post the 3rd Break, we have covered Economic FactorAnalysis:

Global Economy


Demand & Supply Shocks Government Policy

Business Cycles

Now, we will look at Industry Analysis and why & how it is

important from the perspective of Equity Analysis and further

finer aspects of the same.



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Industry Analysis



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Industry Analysis

Defining an Industry

Sensitivity to a Business Cycle

Operating Leverage

Sector Rotation

Industry Life Cycles

Industry Structure & Performance



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Industry Analysis

Defining an industry: It becomes a very crucial

activity and can be difficult at times.

IT-ITES



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Industry Analysis

Sensitivity to the Business Cycle Given the state of the economy, it is very crucial to identify

implications to individual industry.

Not all industries are equally sensitive to the business cycles. For e.g.

automobile manufacturing industry & cigarettes.

Clearly, cigarettes industry is independent of the business cycle.

Demand of cigarettes does not seem to deflect despite the economic

slowdown.

Cigarette consumption is largely led by habit and it forms small

enough part of most of the budgets.

Auto production, by contrast is different. Most of the people would

defer their decision to go for auto purchase till their income level is

higher.



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Industry Analysis

Sensitivity to the Business Cycle

Three things will determine the sensitivity of the

firms earnings to the business cycle

Sensitivity of Sales

Degree of operating Leverage

Financial Leverage



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Industry Analysis


Sensitivity of Sales

Necessities will show little sensitivity to the business

conditions.

Examples of such industries are: food, drugs, and medicalservices

Other industries that show low sensitivity are those whose

demand is independent of income. These incluse tobacco,

movies; because it is observed that people substitute movies

for more expensive sorts of entertainments.

Machine tools, steel, autos, and transportation are

highly sensitive to the state of economy.



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Industry Analysis


Degree of Operating Leverage Operating Leverage: A firm with higher proportion of fixed costs

has higher operating leverage.

Firms with higher operating leverage are more sensitive to theeconomic conditions.

Firms with higher operating leverage will see higher changes in

profitability vis--vis it sales.

DoL = (% Change in Profits)/ (% Change in Sales)

So, if the DoL is 2, then for every 1% change in sales, the profits

move (up or down) by 2% in the same direction.



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Industry Analysis


Degree of Operating Leverage


Recession Normal Expansion

A B A B A B

Sales (Nos mn) 5 5 6 6 7 7

Price per Unit (Rs) 2 2 2 2 2 2

Revenue (Rs mn) 10 10 12 12 14 14

Fixed Costs (Rs mn) 5 8 5 8 5 8

Variable Costs (Rs mn) 5 2.5 6 3 7 3.5

Profits (Rs mn) 0 (0.5) 1 1 2 2.5


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Industry Analysis

Concept Check Question 4 What will be the profits in the three scenarios for Firm C

with fixed costs of Rs 2 mn and variable costs of Rs1.5 per

unit? What are your conclusions regarding operating

leverage?



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Industry Analysis


Financial Leverage



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Industry Analysis

Sector Rotation


Financial Stocks Excel Consumer Durables Excel

Capital Goods Excel

Basic Industries Excel

Consumer Staples Excel

Contraction ExpansionPeak

Trough


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Industry Analysis

Peak

At the peak of the business cycle, the economy

would be over heated with high inflation and

would be characterized by higher interest rates

and pricing pressures on basic commodities

This might be good time to invest into firms

engaged in natural resource extraction and

processing such as minerals or petroleum.



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Industry Analysis

Contraction Phase: In the contraction or recession, one would expect

industries that are less sensitive to the economic

conditions. For example pharmaceuticals, food, and other

necessities. At the height of contraction, the financial firms will be hurt

by the shrinking loan volumes and higher default rates.

Towards the end of the contract phase, however, financials

could do well as contraction would induce lower inflation

and interest rates.



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Industry Analysis

Trough

It is the point at which many of the firms may be

looking forward to investing in to cater for the

future demand.

It is the phase where you should invest into capital

goods industry such as equipments,

transportation or construction.



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Industry Analysis

Expansion Phase:

It is the phase where consumer durables would do

well. Luxury businesses, automobiles would do

well. In this phase, banks will also do well as loans

volume would go up and default rate would below.



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Industry Analysis


In which phase of the business cycle would

you expect the following industries to enjoy

their best performance? News paper

Machine tools

Beverages

Timber



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Industry Analysis

Industry Life Cycle Look at industries like Biotechnology you will find higher

rate of investment, higher rates of return and lower

payouts

Versus, look at the industries like utilities, you will findlower investments, modest rates of return and higher pay

out.

New industries will always offer high risk/ high returns kind

of profile.

Where as, the mature industries will be cash cows andwill be low-risk, low return but higher dividends proposal.



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S1

S2

S3

S4S5

S1 : Pioneering Development S2 : Rapid Accelerating Growth

S3 : Mature Growth S4 : Stabilization & Market Maturity

S5 : Deceleration of Growth and Decline

Industry Analysis Industry Life Cycle


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Industry Analysis

Peter Lynchs Approach

Slow Growers Large & aging companies that will only grow at a rate slightly

higher than economy. They have matured from their high growth

phase and have steady cash flows and pay generous dividends.

Indicating the companies is generating more cash that can be

profitably invested in the business.

Stalwarts

They grow faster than the slow growers, but are not in

very rapid start up phase. These tend to be non-cyclicalindustries



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Industry Analysis Peter Lynchs Approach

Fast Growers Small and aggressive firms have growth rates in the range of 25-

40% annually.

Cyclicals

Companies whose profits expand and contract with the business

cycles. Turnarounds

These are the companies that are in bankruptcy or soon might be.

If they recover from this, they can offer tremendous returns.

Asset Plays

There could be companies possessing assets that are not getting reflectedin the current stock . It could be a piece of real estate, some apparently

intangible asset that could take the stock value to different heights.



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Porters FiveForce Model

Industry Competitors

(Rivalry

among Existing

firms)

Potential Entrants

Suppliers Buyers

Substitute

Bargaining Power

of Suppliers

Bargaining Power of

buyers

Threat of

Substitutes

Threat of new

entrants

Industry Analysis


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Important Facets of Industry Analysis

Structural Changes in the Economy

Structural changes are widespread or long term changes of the fundamental

structure of the economy

Eg: The Liberalization of the Indian Economy

Globalization a structural change in the world economy

The changing of US economy from a manufacturing giant to a service oriented economy

The down fall of communism in Soviet is a structural change for the economy

Industry Analysis


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Effect of Inflation

Higher Inflation causes uncertainty about future prices and cost , causes

Higher Interest rates and is harmful for firm as their costs increase.

But on the contrary Inflation is good for Natural resourceindustries, Industries with high operating leverage or with high financial

leverage.

Interest rates

Higher Interest rates are harm full for the Banking and Financial sector

and the construction sector but they increase the income of retirees

Industry Analysis


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Study of Demographics

Demographics includes the population growth and age distribution

along with this it also includes geographical distribution of

people, changing ethnic mix in the society and changes in the income

distribution

Eg: The expected decline in workforce in Japan in the next 15 years

due to changes in priorities.

Study of Lifestyle

Lifestyles deal with how people live , work consume, educate themselves as

the consumer behavior gets affected by trends and fads.

These things affect industries like the housing, hospitality automobiles,

retail financial services and entertainment industry

Industry Analysis


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Technology

Technology implementation across industries can affect the a large part of the

economy .

Eg : Carburetors are out of demand as fuel injection technology was introduced.

Companies generate their own power , so demand of power in industrial area

goes down.Internet has brought down the cost of advertising drastically.

Study of Regulations and Politics

Political change reflects social values , social trend gets converted in to a law

or tax.

Eg : The government controls prices of life savings drugs

Industry Analysis

d l


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Consumer SentimentsConsumer spending has a large impact on the economy and consumer

spending is a function of consumer sentiments . Optimistic consumers are

good for the economy and affect various sectors

Eg: Spending in Cars, Cloths, White goods and borrow for house purchase etc

International Economics

International economies are constantly interacting with each other which

affects the value of currency of the nation. The exports and imports gets affected.

Creation of free trade zones and International communities for trade benefit the

companies present in those areas those areas

Eg : Fluctuation of the Indian rupee or the US dollarEuropean community , North America Free trade zone, SAARC etc.

Industry Analysis

Industry Analysis


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Study of Global Industry

Studying scenario in the global industry helps to understand the developmentand scope for the domestic industry, by introduction of multinational players in

the market and the market dynamics change

Eg: The Automobile sector witnessed a rapid change due to the foreign car makers

entering India.

Relation of the Global and Local Industry

The study of domestic industrys interaction and dependence on the global

players helps us to understand the revenue expectations from the industry in the

short term and long term.

Domestic Industrys presence in global area brings revenue in foreign currency

Eg : Indian Computer manufacturers depend completely on foreign companies like Intel

for their core material requirements

I d A l


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History of the Industry in world and India

The complete knowledge of the industry right from its inception and major milestones in

World and India gives a deep understanding about the industry and helps to spot trends

and major shift in the industry

Current Happenings in the Industry

An update about the happenings in the industry helps to understand the future

direction of the industry and growth prospects of the industry

SWOT

SWOT analysis helps to have a clear picture about the industrys Advantage

points and the areas where it can face problems in future. This study helps to

understand the effect of various events from the Industrys perspective.

Industry Analysis


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E i R h W k h


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Be-Do-Have


B f W E d d S i


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Before We End todays Session

Please carry your homework sheets with you

Please carry your soft data on Pen drives, if

you require

Please return your name tags while going I am around to ask any questions you may

have

Make sure that you are calling your mentors

on the time decided



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Thank You

Session 1 Ends 6pm

Documents

Equity Research Workshop Session 1