Research AnalystCertification Guide.
Mandatory for SEBI Research Analyst registration. Covers fundamental analysis, valuation, financial statement analysis, technical analysis, and regulatory compliance. The most intellectually demanding of the Big 3.
Difficulty
Intermediate
Suggested prep: 25-35 days
Negative marking
25%
Avoid blind guessing.
Validity
3 years
Computer-Based Test (CBT)
Priority
Rank 3
Research track
What this certification is really testing.
This template pulls directly from the NISM database so the article stays factual, structured, and easy to scan before you register.
Ideal for
Aspiring SEBI Registered Research Analysts
Finance professionals wanting to publish stock recommendations
Equity research careers at brokerages/AMCs
Financial influencers/content creators
Career paths
SEBI Registered Research Analyst
Equity Research Analyst at Brokerage
Independent Stock Advisory (SEBI RA)
Financial Content Creator (legally compliant)
Sell-Side / Buy-Side Analyst
Mandatory for
SEBI Registered Research Analysts (RAs)
Employees of research firms providing investment recommendations
Anyone publishing stock recommendations publicly
Study by chapter weightage, not by guesswork.
The highest scoring chapters carry 28% of the paper. Start there, then use the low-weight chapters for polish.
High-weightage focus
Company Analysis Financial/Quantitative Analysis
14%Income Statement analysis revenue, EBITDA, PAT | Balance Sheet analysis assets, liabilities, equity | Cash Flow Statement CFO, CFI, CFF
Valuation Principles
14%P/E Ratio trailing vs forward P/E | P/B Ratio and when to use it (banking/NBFC) | EV/EBITDA enterprise value multiples
Key concepts to remember
P/E Ratio = Market Price per Share / Earnings per Share lower P/E always cheap
P/B Ratio is most useful for banking and NBFC stocks (asset-heavy businesses)
EV/EBITDA = (Market Cap + Debt Cash) / EBITDA capital structure neutral
DCF: Value today = sum of all future cash flows discounted at required rate of return
DuPont ROE = Net Margin Asset Turnover Financial Leverage
SEBI RA registration requires: net worth of Rs. 5 lakhs (individual), qualification in finance, NISM XV certificate
Research Analyst must disclose: financial interest, compensation received, conflict of interest in every report
Insider trading = trading on UPSI (Unpublished Price Sensitive Information) strict penalties
CAPM: Expected Return = Risk-Free Rate + Beta (Market Return Risk-Free Rate)
Operating leverage = Fixed costs / Total costs higher operating leverage = more volatile earnings
Porter's Five Forces: Threat of new entrants, Bargaining power of buyers/suppliers, Threat of substitutes, Industry rivalry
Free Cash Flow = CFO Capital Expenditure the true measure of cash available to shareholders
Important formulas
P/E Ratio = Market Price per Share / EPS
P/B Ratio = Market Price per Share / Book Value per Share
EV = Market Cap + Total Debt Cash & Cash Equivalents
EV/EBITDA = Enterprise Value / EBITDA
ROE = Net Profit / Shareholders' Equity 100
ROE (DuPont) = (Net Income/Sales) (Sales/Assets) (Assets/Equity)
ROCE = EBIT / Capital Employed 100
Current Ratio = Current Assets / Current Liabilities
Debt-to-Equity = Total Debt / Shareholders' Equity
Interest Coverage = EBIT / Interest Expense
Dividend Yield = Annual Dividend per Share / Market Price 100
PEG Ratio = P/E Ratio / Earnings Growth Rate
Free Cash Flow = Cash from Operations Capital Expenditure
Gordon Growth Model: P = D / (r g)
CAPM: E(R) = Rf + (Rm Rf)
Sharpe Ratio = (Rp Rf) / p
A clear way to study this module.
Use the database strategy as the practical order of attack: official workbook first, high-weightage chapters next, then mocks and exam-day control.
Study strategy
This is the most intellectually demanding NISM exam allocate 25-35 days minimum
Chapters 8 (Financial Analysis) + 10 (Valuation) carry 28% combined master these first
Practice calculating ALL financial ratios P/E, P/B, ROE, ROCE, D/E, ICR, Current Ratio
Learn DCF conceptually you won't calculate full DCF but must understand the framework
Chapter 13 (Legal) is 10% memorize SEBI RA registration requirements and code of conduct
Technical Analysis (Ch 14) is only 5% know the basics (support, resistance, moving averages) but don't over-invest time
For case studies: practice reading mini financial statements and extracting insights quickly
Take 3-4 full-length mock tests with case studies in exam conditions
Exam-day tips
Case studies take longer attempt MCQs first, then tackle the 5 case studies
0.25 negative marking be cautious with guesses on MCQs
For financial ratio questions, write down the formula before calculating
Regulatory questions (Ch 13) are scored easy don't skip them
Case studies often test: ratio interpretation, valuation comparison, or regulatory compliance
Budget: 60 min for 80 MCQs + 45 min for 5 case studies + 15 min review
Scoring warning
The pass mark is simple. The paper is not.
Because this paper has negative marking, precision matters more than speed. Attempt the sure questions first, then return to calculations and close-call options.
Open NISM PortalCommon mistakes
Confusing trailing P/E (past EPS) with forward P/E (projected EPS) the exam specifies which
Using P/B for service companies P/B is most relevant for banking/asset-heavy businesses
Forgetting that EV includes debt so EV/EBITDA is capital structure neutral, P/E is not
Not reading SEBI RA disclosure requirements carefully many questions test specific clauses
Spending too much time on case studies flag and move on if stuck