How to Break into Equity Research and Land your Dream Job
Welcome to the latest episode of The Zista Podcast, where we delve into the captivating world of equity research. Jitendra Gohil, a seasoned expert with extensive experience at institutions like the Bombay Stock Exchange, Bank of America and Credit Suisse, shares invaluable insights. Gain a deeper understanding of equity research, the different roles one can play in this field, and why it is a lucrative career option in the years to come.
In this episode, Mr. Gohil unravels the nuances of equity research, providing a wealth of knowledge to inspire and inform. As a sought-after subject matter expert, he has been featured in top-tier business publications and appeared on esteemed media platforms such as ET Now and CNBC. Tune in to The Zista Podcast and embark on a thought-provoking exploration of equity research with Jitendra Gohil, as we unlock the secrets to success in this exciting realm of finance.
Welcome to the latest episode of The Zista Podcast, where we delve into the captivating world of equity research and its potential as a rewarding career choice. Whether you’re a student exploring your options or are simply intrigued by the field, this episode is a must-listen.
Join us as we sit down with Jitendra Gohil, a seasoned industry professional. Mr. Gohil is a Director at Credit Suisse and heads their Equity Research and Wealth Management practice. With over 20 years of experience, Mr. Gohil’s expertise is unparalleled. He has worked with prestigious institutions like the Bombay Stock Exchange, Bank of America and Credit Suisse, solidifying his position as a subject matter expert. His insights are regularly quoted in top business publications, and he is a familiar face on prominent media platforms such as ET Now and CNBC.
In this episode, we’ll uncover the intricacies of equity research, gaining valuable insights from Mr. Gohil’s wealth of experience. Discover the dynamic nature of the industry, the strategies employed, and the trends shaping the financial landscape. Whether you’re considering a career in equity research or simply seeking a deeper understanding of this fascinating field, this episode promises to inform and inspire. Tune in to The Zista Podcast as we embark on a captivating journey with Jitendra Gohil, unraveling the world of equity research and uncovering the possibilities it holds for aspiring professionals.
- While AI has the potential to disrupt various industries, its impact on equity research is still uncertain, and currently, there haven’t been major disruptions observed on the research side.
- Equity research roles involve valuing companies, conducting industry analysis, and assessing investment potential from short-term to long-term perspectives.
- Specialized areas in equity research include macro research, buy-side research, sell-side research, derivatives research, and sector analysis, among others.
- Equity research professionals can explore related areas such as different sectors or transition to buy-side roles, investment banking, PE funds or IPO research.
- Having relevant qualifications like CA, MBA, or CFA can significantly enhance your career prospects in equity research.
Q: Is a career in equity research lucrative? What is the potential for students choosing this path in the next decade?
A career in equity research has the potential to be lucrative, particularly in the context of India’s economic growth. He notes that India is currently a $3 trillion economy with a per capita income of $2200, and it is projected to grow to a seven to ten trillion economy in the next decade. With this growth, equity as an asset class is expected to attract a substantial amount of investment. Jitendra emphasizes that the financialization of saving in India is still at an early stage, with a significant number of new accounts being opened. Over the next 5 to 10 years, he predicts a dramatic improvement in overall market liquidity as more money flows into the equity market and mutual funds. Based on these factors, Jitendra believes that equity research will offer improved career opportunities for students entering the field.
Q: How is AI impacting the field of equity research, and will it have a significant impact on this line of work?
AI has the potential to disrupt various industries, although the extent of its impact on equity research is still uncertain. From an analyst’s perspective, companies utilizing AI technologies have seen benefits in terms of cost reduction. When it comes to the stock market, AI is already disrupting trading capabilities, particularly in day trading and options trading, where large order executions are being affected. As for research, it is a specialized field where human insights and perspectives play a crucial role. While AI has the potential to disrupt research in the next 5 to 10 years, currently there haven’t been any major disruptions observed on the research side. Nevertheless, some research analysts may choose to leverage AI as an enabler to improve their processes rather than viewing it as a disruptor to the research profession.
Q: What are the roles and career paths that students can explore in equity research?
Equity research involves valuing a company and providing a price target, considering top-down industry analysis and assessing the investment potential from a short-term (three months) to long-term (3 to 10 years) perspective. There are various types of research and investors in the field. As an equity research professional, one primarily focuses on valuations, conducting cash flow analysis, and understanding how to value a company. Additionally, there is macro research, where knowledge of macroeconomic fundamentals is preferred, as a company’s operating performance can be influenced by macro factors. Another aspect is buy-side research, where a mutual fund analyst evaluates multiple research reports to choose stocks for investment. This complements the in-depth analysis conducted by sell-side research teams. Other specialized forms of research include derivatives research, which involves technical analysis using charts and graphs, and strategists who assess different sectors and provide recommendations based on various parameters such as earnings, macro backdrop, and valuations. The career path in equity research can begin with entry-level roles such as data mining or analyst positions, involving tasks like crunching macro research data or building financial models in Excel. As one gains experience, they can progress from being a company research analyst to a sector analyst, and potentially a strategist or head of research. Ultimately, the specific career path within equity research depends on the individual’s interests and choices.
Q: Did you face challenges in your career, and what kept you going?
Jitendra shares that facing challenges in his career required a combination of passion and dedication. Given the nature of the field, being a research analyst demands long hours and analyzing a continuous flow of information, including political and stock analysis. Jitendra emphasizes the importance of passion and patience, as the sector requires individuals to invest considerable time in staying updated and honing their analytical skills. It took Jitendra nearly seven years to reach the level of analysis he currently performs, and he has been in the field for almost 20 years. He initially started as a relationship manager but felt drawn to the research field, where he enjoyed reading about companies and making market calls. He took the necessary steps to improve his knowledge and skills, gradually transitioning from building models for companies to writing reports. Jitendra also highlights the emerging field of forensic research, which involves analyzing the alignment of management statements with stock price movements. He emphasizes the importance of diligence and fiduciary responsibility. Despite the challenges, Jitendra finds the field rewarding and believes that passion and dedication are key to success in the industry.
Q: If someone starts their career in equity research, can they explore other related areas or are they committed exclusively to equity research?
Starting a career in equity research doesn’t necessarily limit one to that specific field. The equity research industry is vast and interconnected, allowing professionals to explore related areas. For example, if someone focuses on analyzing the cement sector for several years, they can later transition to analyzing the infrastructure sector, as these sectors are related. While the fundamentals may differ, the experience gained in one sector can be leveraged in another. Additionally, individuals working on the sell-side with a focus on in-depth analysis and writing reports can later move to the buy-side, such as a long-shot fund or mutual fund. Investors often seek analysts with extensive experience in specific sectors, making them attractive candidates. There are also opportunities in investment banking, particularly in conducting research for companies going public through an IPO. The field offers various avenues for exploration, allowing professionals to move from sell-side research to buy-side research, shift between research houses, mutual fund houses, or private equity funds. In summary, professionals starting in equity research have the flexibility to explore different areas within the broader financial industry.
Q: What qualifications and resources are necessary for students to succeed in the field of equity research?
Students aspiring to succeed in equity research should have a strong foundation in accounting and financial statement analysis. Understanding how balance sheets and income statements are managed is crucial. Interestingly, individuals from non-finance backgrounds, such as those with engineering degrees, can also excel in this field if they possess logical analysis skills related to financial statements and cash flows. Additionally, the ability to write well and effectively communicate research findings is essential. Over time, as one gains experience in financial modeling and developing price targets for stocks, the skill of presenting information to the audience becomes important. Successful research analysts are not only knowledgeable in providing buy and sell recommendations and price targets but also excel in communication and presentation. Having relevant qualifications such as a CA certification, MBA degree, or CFA specialization in finance can significantly boost one’s career in equity research. These degrees provide a comprehensive understanding of finance and enhance the chances of success in the field.