NISM Certifications Research Analysis and Fundamental Valuation Syllabus

Research Analysis and Fundamental Valuation syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Research Analysis and Fundamental Valuation in NISM Certifications, not a summary of it.

1. 1

   Research Analyst Regulatory Framework

   3 topics

   • SEBI (Research Analysts) Regulations, 2014
     • Registration and qualification norms
     • Disclosure of interest and conflicts
     • Compliance and record-keeping
   • Ethics and Professional Standards
     • Independence and objectivity
     • Handling of material non-public information
   • Research Report Standards
     • Mandatory disclosures in reports
     • Rating definitions and target prices
2. 2

   Economic and Industry Analysis

   3 topics

   • Macroeconomic Analysis
     • GDP, inflation, and interest rates
     • Fiscal and monetary policy
     • Business and economic cycles
   • Industry Analysis
     • Porter's five forces
     • Industry life cycle
     • Competitive positioning
   • Global and Sectoral Influences
     • Commodity and currency linkages
     • Regulatory and policy impacts
3. 3

   Financial Statement Analysis

   3 topics

   • Understanding Financial Statements
     • Balance sheet, P&L, and cash flow
     • Notes to accounts and accounting policies
     • Consolidated versus standalone statements
   • Ratio Analysis
     • Profitability and efficiency ratios
     • Liquidity and solvency ratios
     • Valuation ratios
   • Quality of Earnings
     • Accounting red flags
     • Cash flow versus accrual analysis
4. 4

   Valuation Approaches

   3 topics

   • Discounted Cash Flow Valuation
     • Free cash flow estimation
     • Cost of capital and WACC
     • Terminal value and sensitivity
   • Relative Valuation
     • P/E, P/B, EV/EBITDA multiples
     • Peer comparison
   • Other Valuation Methods
     • Dividend discount model
     • Sum-of-the-parts valuation
5. 5

   Technical Analysis Basics

   3 topics

   • Chart Patterns and Trends
     • Support and resistance
     • Trendlines and chart formations
   • Technical Indicators
     • Moving averages and MACD
     • RSI and oscillators
   • Volume and Momentum Analysis
     • Volume confirmation
     • Momentum and trend strength

Research Analysis and Fundamental Valuation flashcards for NISM Certifications

19 of 54 cards from the Research Analysis and Fundamental Valuation deck — real questions with worked answers.

1. Under SEBI (Research Analysts) Regulations, 2014, who is defined as a 'research analyst'?

   A person responsible for preparing or publishing research reports, providing research reports, making buy/sell/hold recommendations, giving price targets, or offering opinions on public offers of securities.

2. What is the minimum net worth requirement for a research analyst that is a body corporate or LLP under the SEBI RA Regulations (as amended)?

   A net worth of at least Rs. 1 crore (for body corporate/LLP). Individuals and partnership firms must maintain a deposit-based requirement instead of net worth (earlier Rs. 1 lakh net tangible assets).

3. What minimum qualification does the SEBI RA Regulations require for a research analyst?

   A professional/postgraduate degree (or postgraduate diploma) in finance, accountancy, business management, commerce, economics, capital markets, banking, insurance or actuarial science, OR a graduate with 5 years of relevant experience, plus a valid NISM certification.

4. How long must a research analyst maintain records of research reports, recommendations and supporting documents under SEBI RA Regulations?

   For a minimum period of 5 years.

5. Under SEBI RA Regulations, what is the trading restriction (blackout) around publishing a research report?

   A research analyst (and their employees) cannot trade in the subject security for 30 days before and 5 days after the publication of a research report, and must not trade contrary to their own recommendations.

6. What disclosures must a research analyst make regarding their financial interest in the subject company?

   They must disclose any actual/beneficial ownership of 1% or more in the securities, any other material conflict of interest, compensation received, and whether they or their relatives hold a financial interest or directorship in the subject company.

7. What are the four key principles of ethics and professional standards for a research analyst?

   Integrity, independence and objectivity, avoidance of conflicts of interest, and fair disclosure/diligence. Analysts must act honestly, with reasonable care, and place clients' interests first.

8. What is meant by 'independence and objectivity' for a research analyst?

   Research opinions must be based on the analyst's own honest assessment, free from undue influence by the issuer, investment banking, sales, or any compensation arrangement that could bias the recommendation.

9. What is a 'Chinese Wall' in the context of research analysis?

   An information barrier separating the research function from investment banking and other departments to prevent conflicts of interest and the flow of material non-public information.

10. What essential elements must a compliant research report contain?

    The basis/rationale of recommendation, valuation methods and risks, the price target with time horizon, the recommendation (buy/sell/hold), the date, the analyst's identity and certification, and all relevant disclosures and disclaimers.

11. What is a 'research analyst certification' statement in a report?

    A statement that the views expressed accurately reflect the analyst's personal views and that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views in the report.

12. In a typical buy/sell/hold rating scale, what does each rating signify?

    Buy = expected to outperform/return above a threshold; Hold = expected to perform in line with the market; Sell = expected to underperform/decline relative to a threshold over the stated time horizon.

13. What is the difference between 'top-down' and 'bottom-up' approaches in security analysis?

    Top-down starts with macroeconomy, then industry, then the individual company (EIC framework). Bottom-up starts by analyzing individual companies first, giving less weight to macro/industry conditions.

14. What does the EIC framework in fundamental analysis stand for?

    Economy - Industry - Company: a top-down sequence where you first analyze the macroeconomy, then the industry, then the specific company.

15. What is GDP and why is it important in macroeconomic analysis?

    Gross Domestic Product is the total monetary value of all final goods and services produced within a country in a period. It measures overall economic activity; rising GDP generally supports corporate earnings and equity markets.

16. What are the main phases of a business cycle?

    Expansion (recovery), Peak (boom), Contraction (recession/slowdown), and Trough. Equity, bonds, and sectors perform differently across these phases.

17. How do interest rate changes affect equity valuations?

    Rising interest rates raise the discount rate and borrowing costs, generally lowering present values and equity prices; falling rates do the opposite. Rate-sensitive sectors (banks, real estate, autos) are most affected.

18. What is the difference between fiscal policy and monetary policy?

    Fiscal policy is the government's use of taxation and spending to influence the economy. Monetary policy is the central bank's (RBI's) control of money supply and interest rates.

19. What is inflation and which indices commonly measure it in India?

    Inflation is the sustained rise in the general price level, eroding purchasing power. In India it is measured by the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).

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