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NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

Research Process and Report Structure for NISM Series XV

Updated 11 October 2026 · Fact-checked

The equity research process is a sequence: define the objective, generate ideas, collect data, analyse the economy, industry and company, value the stock, form a recommendation, write the report and monitor it. A research report presents this work with the rating, target price, rationale, assumptions, risks and disclosures.

Understand Research Process and Report Structure

Research is a repeatable process, not a guess. A research analyst starts with a question: should an investor buy, hold or sell this security? Every later step exists to answer that question with evidence.

The usual flow runs from broad to narrow. You define the purpose and scope, generate ideas (screens, news, sector themes, client queries), and collect data from reliable sources such as annual reports, exchange filings, regulators and industry bodies. Next comes analysis: the economy, then the industry, then the company, covering business, governance and financials. Then you value the security, compare value with market price, and reach a recommendation. Finally you communicate it in a report and track it afterwards.

The report is the finished product of that work. A good report is clear, supported by data and states its basis. Typical components are: the title and date, the recommendation or rating, the target price and time horizon, a summary of the investment thesis, business and industry overview, financial analysis and forecasts, valuation with method and assumptions, risks, and disclosures about the analyst's and firm's interests.

Exam questions test the order of steps, which step a task belongs to, and which component answers a given need. Learn the logic: you cannot value before you have data and forecasts, and you cannot recommend before you have a valuation to compare with price.

Key formulas to remember

Process order
Objective → Idea generation → Data collection → Economy, industry, company analysis → Forecasting → Valuation → Recommendation → Report → Monitoring
Wording of steps varies by source, but the logical order does not. Valuation comes after analysis and forecasts.
Upside to target price
Upside (%) = (Target price − Current market price) ÷ Current market price × 100
Used to link valuation to a rating. Rating bands are set by each firm, not fixed by a universal rule.
Core report components
Rating + Target price + Horizon + Thesis + Financials + Valuation basis + Risks + Disclosures
A recommendation without its basis and risks is incomplete.

How to solve Research Process and Report Structure questions

Use this method for any question on the research process or report structure.

  1. 1Read the question and decide whether it asks about sequence, purpose of a step, or a report component.
  2. 2For sequence questions, place each option on the broad-to-narrow line: objective, ideas, data, analysis, valuation, recommendation, report, monitoring.
  3. 3Ask what input each step needs. A step that needs another step's output must come after it.
  4. 4For component questions, match the need to the section: price view to target price, reasons to thesis, what could go wrong to risks, conflicts to disclosures.
  5. 5Watch for words like first, last, most important, NOT and except.
  6. 6Eliminate options that put the recommendation before valuation or valuation before data.
  7. 7Pick the option that is complete and logical, and check the wording once more before moving on.

Quickest way: Dependency check

When to use it: Use for any ordering or which-comes-next question when time is short.

  1. Find the step named in the question.
  2. Ask: what must already exist for this step to happen?
  3. Choose the option that supplies that input.
  4. For report parts, ask: is this the view, the proof, the risk or the disclosure?

Common mistakes in Research Process and Report Structure

  • Placing the recommendation before valuation.

    Students think the rating is the main idea, so it feels early.

    Fix: Remember the rating compares value with price. No valuation, no rating.

  • Treating data collection as the first step.

    Data feels like the start of work.

    Fix: Purpose and scope come first. They decide what data you need.

  • Skipping monitoring as part of the process.

    The report feels like the finish line.

    Fix: Research continues after publication. Estimates and ratings are updated as facts change.

  • Confusing risks with disclosures.

    Both sit near the end of a report.

    Fix: Risks are what could make the view wrong. Disclosures state interests, holdings and conflicts of the analyst and firm.

  • Thinking a report needs only a rating and target price.

    Short summary notes show only these.

    Fix: A complete report also gives the thesis, assumptions, valuation basis and risks.

Worked examples

Example 1

Which of the following is the correct order of steps in the equity research process? (A) Valuation, data collection, recommendation, report (B) Data collection, valuation, recommendation, report (C) Recommendation, valuation, data collection, report (D) Data collection, recommendation, valuation, report

Show the solution
  1. Valuation needs data and forecasts, so data collection comes before valuation. This rules out A and C.
  2. The recommendation compares value with market price, so it needs valuation first. This rules out D.
  3. B fits: data, then valuation, then recommendation, then report.

Answer: (B) Data collection, valuation, recommendation, report

Example 2

A report says a stock is trading at ₹800 and gives a target price of ₹920. What is the upside, and which component states the factors that could stop the target being reached?

Show the solution
  1. Upside = (920 − 800) ÷ 800 × 100.
  2. 120 ÷ 800 = 0.15, so the upside is 15%.
  3. Factors that could make the target fail are described in the risks section, not in disclosures or the thesis.

Answer: Upside is 15%. The risks section covers what could stop the target being reached.

Exam tips

  • Expect sequence questions. Learn the order as a chain where each step feeds the next.
  • For component questions, match the need to the section: rationale, assumptions, risks, disclosures.
  • Do not assume a fixed rating scale. Firms define their own bands.
  • NISM-Series-XV has negative marking of 25% of the marks for a question, so eliminate options logically before guessing.

Practice questions from Introduction to Research Analyst Profession

Research Process and Report Structure in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Research Process and Report Structure: frequently asked questions

What are the steps in the equity research process?

Define the objective, generate ideas, collect data, analyse the economy, industry and company, forecast and value, form a recommendation, publish the report and monitor. Keep the order logical, as each step feeds the next.

What are the main components of a research report?

A report usually has the rating, target price and horizon, the investment thesis, business and industry overview, financial analysis, valuation basis and assumptions, risks and disclosures.

Is there a fixed format for a research report in NISM Series XV?

Firms vary in layout, so learn the components and their purpose rather than a fixed template. Questions test what each part does and why it matters.

Why is monitoring part of the research process?

Facts change after a report is published, such as results, policy or management actions. Monitoring lets the analyst update estimates, valuation and the rating.