Sector Analysis

Picture this: a market landscape where the strongest sectors and most promising stocks practically jump off the page.

That’s exactly what Sector Analysis does. Let’s take a deep dive into it.

This section is designed to give you a clear, organized view of the market, split across three levels: Sector, Industry Group, and Industries. Each level provides you with detailed data to give an outlook into how each sector, industry group, and industry is fairing in the current markets. 

You can also weigh stocks in three flexible ways: Market Cap, Equal Weight, and Technicals.

Let’s check out each bit in detail now, starting with the Sectors. We will weigh stocks by Market Cap (default view).

As you can see, we use 9 key metrics (when you weigh stocks by market cap/equal weight) to help you assess the overall performance of the sectors (or industry group and industry). 

Starting with Debt to Equity. This ratio shows how much debt a company has compared to its equity, highlighting its financial risk and reliance on borrowed funds for growth.  

Dividend yield shows the percentage return shareholders earn through dividends relative to the stock’s price, helping assess income potential. This can be a great indicator for those who are looking for high dividend-paying stocks. Imagine you make 3-4% through dividends and your stock generates 12% returns, which means in essence, you made roughly 16% returns.

Next, we have the profitability metrics. The PAT and Operating Margin both fall under this category. These are important because they help you analyse how efficiently a company can generate profits from its revenue and operations. 

Then we have the valuation metrics. These metrics compare a company’s stock price to its financial performance. They help investors assess if a stock is overvalued, fairly priced, or undervalued based on its book value, earnings, or sales. The P/B Ratio, P/E Ratio, and P/S Ratio fall into this category.

And finally, we have ROCE and ROE that come under efficiency metrics. These measure how well a company uses its capital and equity to generate profits, indicating overall operational and financial efficiency.

Suppose you want to look at sectors that have high profitability margins, you click on the heading ‘PAT’ and you’ll see this: 

Similarly, if you want to track sectors with high dividend yields, you can repeat the same process, and here’s the result:

(Note: At any given time, you can track only one metric in this way)

Let’s now look at the Technical indicators and see how you can get a sector overview with them.

Starting with the Stocks above 200 EMA/SMA in the red box, you can see the percentage of stocks in a sector trading above their 200-day exponential or simple moving averages. They can help you assess the long-term strengths or weaknesses in the sector.

The next two are Stocks above 50 EMA/SMA as seen in the yellow box gives you a percentage of stocks trading above 50-day exponential or simple moving averages. This can help you identify sectors experiencing a recent uptick in momentum or medium-term performance.

The next in the green box are Stocks above 70 RSI(14) and Stocks below 30 RSI (14). This can give you an understanding of whether a sector is overheated (high % of stocks above 70 RSI) or undervalued (high % of stocks below 30 RSI).

The next two are pretty self-explanatory– (%) stocks close to 52W High/Low and (%) stocks outperforming the benchmarks across different timeframes, highlighted with red and black respectively. 

Let’s take a quick example, we want to look at the sectors with a strong momentum, we’ll look at the sectors with the highest (% of) stocks above 200 & 50 moving averages. 

As we can see, healthcare, textiles, IT, and Realty are showing strong numbers. And in all of these, healthcare also has a very small percentage of stocks above 70 RSI (2.96%). Also, other things are in favor like almost 20% of stocks close to 52W high and many stocks outperforming Nifty (1Y & 6M).

We have used these specific indicators as they capture momentum, trend strength, and reversal points — the three most crucial elements in technical analysis. And they work across all sectors and timeframes, providing consistency in analysis.

[Note: Once you have the data you need, you can download it and save it for your analysis. Just click on the download icon.]

Similarly, folks who want to analyze things at a more granular level can toggle between the industry groups and the industry.

[Image of Industry Group]

[Image of Industry]

Now this is a good example of how handy this tool can be in your analysis. As you can see Electronic Media has a High PAT of 100.64%, but also has a High negative Operating margin. Can you see how easily you can spot such points?

Suppose you want to get a deeper look now at what’s happening in this industry and how the stocks are performing within Electronic Media, just click on it and a screen will appear like this:

You can see the stocks, some key metric data, our proprietary QVM score, and other factor scores. Also, you have the option to look at Factor Map, Heatmap, download, and customize columns.

As we see, this tool can help you analyse a lot of data (that would otherwise be cumbersome and complex) in a simple, efficient, and quick manner.

Let’s now look at our next tool in market analysis.