Systematic Factor Research Framework

The System Behind Every Recommendation

Our systematic factor research framework is grounded in the same Nobel Prize-backed academic foundations used by the world's most sophisticated institutional asset managers — fully documented, reproducible, and applied to the Indian equity universe.

The 6-Factor Scoring Model

Our proprietary scoring system evaluates every stock across six independent factors, each weighted by its empirical predictive power in the Indian equity context.

Value Factor

20%

P/E, P/B, EV/EBITDA relative to sector peers

Quality Factor

25%

ROE, ROCE, Debt/Equity, FCF yield

Growth Factor

20%

Revenue CAGR, EPS CAGR, margin trajectory

Momentum Factor

15%

12-1 month price momentum, earnings revision

Stability Factor

10%

Earnings volatility, beta, drawdown history

Catalyst Factor

10%

Regulatory tailwinds, management change, expansion

Academic Foundations

Built on 50+ Years of Peer-Reviewed Research

Each factor in our scoring model is backed by decades of academic research — the same intellectual foundations used by AQR Capital Management, Dimensional Fund Advisors, and Research Affiliates globally.

Value Factor

Fama & French (1992, 1993)

Eugene Fama — Nobel Prize in Economics 2013. Decades of academic research document a persistent value premium: value stocks have historically delivered excess returns over growth stocks, driven by systematic risk premia.

Quality / Profitability Factor

Novy-Marx (2013) · Fama & French (2015)

Profitable firms earn higher returns. Gross profitability predicts returns at least as well as book-to-market — the quality premium is distinct and persistent.

Momentum Factor

Jegadeesh & Titman (1993) · Carhart (1997)

One of the most replicated findings in academic finance: stocks with strong 12-month trailing returns have historically shown a persistence effect over the following 3–12 months. Past performance of individual stocks is not indicative of future results.

Low Volatility / Stability Factor

Baker, Bradley & Wurgler (2011)

Low-volatility stocks deliver risk-adjusted returns that contradict the CAPM — the low-risk anomaly rewards disciplined investors willing to avoid speculative assets.

Growth Factor

Earnings Revision Literature

Academic research documents a systematic under-reaction by markets to earnings revisions. Stocks with improving earnings trajectories have historically shown a persistent effect over multi-quarter horizons. Past performance of individual stocks is not indicative of future results.

Catalyst Factor

Event-Driven Alpha Research

Regulatory tailwinds, management transitions, and structural industry shifts create asymmetric opportunity windows that systematic screening can identify ahead of consensus.

The 6-Step Research Process

01

Universe Definition

We begin with the top 500 listed Indian equities by market cap. This universe is filtered for minimum liquidity (avg daily volume > ₹2Cr), audit quality (clean Big-4 or equivalent), and basic governance screens.

02

Quantitative Screening

Each stock in the universe is scored on our 6-factor model. Stocks in the top quartile (score ≥ 75th percentile) proceed to the next stage. This eliminates ~75% of the universe systematically.

03

Fundamental Deep-Dive

Surviving stocks undergo full fundamental analysis: business model quality, management integrity assessment, competitive positioning, capital allocation track record, and industry dynamics.

04

Valuation Framework

We apply DCF, relative valuation, and asset-based valuation as appropriate. We require a minimum 20% margin of safety to initiate a Buy recommendation.

05

Risk Parameter Setting

Every recommendation includes: target price, stop-loss level (typically 15-20% below entry), time horizon, and suggested position sizing as a percentage of a diversified portfolio.

06

Publication & Tracking

Reports are published on our research portal on the date they are issued. We maintain a complete quarterly research transparency log — full record, no deletions, no revisions after publication.