NISM Research Analyst Chapter 1: Introduction to Research Analyst Profession

NISM Research Analyst Chapter 1 is all about the introduction of Research Analyst. Here, I have mentioned only the important points which you need to learn or read for your preparation. You will get crisp and easily understandable content. So let’s start.

Who is a Research Analyst?

• A Research Analyst is a professional who studies companies, industries, and markets to give investment recommendations.
• Their role is to provide unbiased, well-researched reports that help investors make decisions.
• Research Analyst are data-driven and highly conceptual people as they have to continuously engage with latest trends and numbers.

Key Roles of a Research Analyst

• They collect and analyze financial data of companies.
• They study industry trends and market conditions.
• They use valuation methods to estimate a company’s worth.
• They prepare research reports with recommendations like Buy / Hold / Sell securities.

Importance of Research in Capital Markets

• A proper research gives investors confidence to invest in the market.
• Research helps in identifying good opportunities and avoiding risky ones.
• A proper research ensures transparency in the market by sharing structured information.

Types of Research

Fundamental Research

• In fundamental research the focus is on economy, industry, and company.
• Uses tools like ratio analysis, valuation, earnings forecasts.
• The goal is to know whether the stock is undervalued (cheap) or overvalued (expensive).
• Example: Let’s say, if you study Infosys’s balance sheet, income statement, debt, future growth, and then decide whether to buy or not, this is fundamental research.

Technical Research

• In technical research the focus is on price movements and charts.
• Uses patterns, trends, and trading volumes to predict prices.
• The goal is to predict future price movement based on past trends.
• Example: Let’s say, if Reliance share is moving between ₹2500–₹2600 many times, a technical analyst may predict on the basis of technical research that, “If it breaks ₹2600, it may go higher.”

SEBI Regulations for Research Analysts

• Must register with SEBI.
• Must have NISM certificate + qualification.
• Follow Code of Conduct (fair, honest).
• Must disclose interests in stocks.
• No conflict of interest.
• Trading restrictions around recommendations.
• Keep records for 5 years.
• SEBI can inspect anytime.

Skills Required for Research Analysts

• One should have a good knowledge of finance and accounting.
• Ability to interpret financial statements.
• Strong analytical skills is a must.
• Good writing skills to prepare clear research reports.

“That’s all for NISM Research Analyst Chapter 1. In short, this chapter sets the foundation of what a Research Analyst does and why they matter in capital markets. In the next chapter, Introduction to Securities Market – Part 1 we’ll explore the basics of securities markets.”