| name | financial-report-analysis |
| description | Analyze financial reports for NSE/BSE stocks: revenue, profit, margins, EPS, debt, cash flow,
ROE, ROCE, working capital, capex, and earnings quality. Use for quarterly results, annual
reports, fundamentals, or business performance review.
|
Financial Report Analysis
The goal is to judge whether business performance is improving, stable, or deteriorating, and whether profits are high quality.
Tools
USE these tools in this order:
- NSE/BSE exchange filings — primary source for quarterly and annual financial results (PDF/text format from the exchange).
- Company investor relations page — annual reports, investor presentations, earnings transcripts. Best source for segment breakdown and management commentary.
- Finance portals (Screener, Trendlyne, Tickertape) — for multi-year ratio tables, peer comparison, and standardized financial data. Use for historical ratios (ROE, ROCE, margins) across 3-5 years.
- Groww MCP holdings tool — to check shareholding pattern and promoter holdings alongside financial data.
- Web search — only for news about financial irregularities, auditor changes, or regulatory actions not yet on the exchange.
If data is thin (e.g., smallcap with limited disclosure), use whatever is available and label the analysis "limited data — low confidence."
Data Needed
- Latest quarterly and annual revenue, EBITDA/operating profit, PAT, EPS
- YoY and QoQ growth where available
- Margins: gross, EBITDA/operating, net
- Balance sheet: debt, cash, equity, reserves, working capital
- Cash flow: CFO, capex, free cash flow
- Return ratios: ROE, ROCE, ROA when relevant
- Segment performance, order book, AUM, loan book, NPA, same-store sales, or other sector-specific metrics
Analysis Framework
- Growth: revenue, profit, EPS, and volume growth. Separate organic growth from one-offs.
- Margins: expansion/compression drivers, sustainability, raw-material or pricing pressure.
- Balance sheet: debt load, interest coverage, cash, leverage, contingent liabilities.
- Cash flow quality: CFO vs PAT, free cash flow, receivables, inventory, capex intensity.
- Working capital health: debtor days vs creditor days vs inventory days (cash conversion cycle). Flag if working capital is expanding while profits grow — a classic cash bleed. Also check if promoter advances or related-party receivables are growing faster than revenue.
- Segment quality: every segment must be checked independently. A holding company can mask a burning subsidiary behind a profitable-looking core. Flag any segment with negative margins or negative CFO.
- Capital efficiency: ROE/ROCE trend and whether reinvestment earns attractive returns.
- Earnings quality: one-time gains, accounting changes, receivables growth faster than sales, cash conversion weakness.
- Management commentary: guidance, demand outlook, risk statements, capex plans.
Sector Metric Overrides
Do not rely on generic financial ratios alone. Check for sector-specific metrics first:
| Sector | Must-Check Metric | Why It Matters |
|---|
| Banks / NBFCs | GNPA, NNPA, PCR, CD ratio, RoA | Asset quality drives long-term returns; NPA can be hidden |
| Mutual Funds / AMC | Quarterly AAUM, expense ratio, market share trend | Flows drive revenue more than market level |
| IT / Tech | Utilization, deal pipeline, offshore mix, USD revenue | Currency and utilization mask true growth |
| Pharma | USFDA 483 citations, ANDA pipeline, R&D % | Regulatory risk is binary, not gradual |
| Infrastructure / Construction | Order book quality, execution track record, working capital intensity | Revenue recognition is a common manipulation vector |
| Real Estate | pre-sales, collections, inventory, land bank cost | Recognized revenue ≠ cash collected |
| FMCG | Volume growth vs value growth, channel inventory | Sometimes the trade hides real demand weakness |
Output
## Financial Report Analysis
- Growth trend: ...
- Margin trend: ...
- Working capital: ...
- Segment quality: ...
- Balance sheet: ...
- Cash flow quality: ...
- Capital efficiency: ...
- Earnings quality: ...
- Sector health: ...
- Financial verdict: [Improving / Stable / Mixed / Deteriorating]
If fresh financials are unavailable, use the latest available period and label it clearly.
