To understand the variables impacting the stock price, one needs to look at these variables from the point of view of the EIC model. The EIC model refers to (Economy, Industry, Company) model wherein the analyst first satisfies himself on the macroeconomic factors, then the industry factors and finally the company level factors. Following are the key company level factors and how they impact the stocks.

At a company level, you drill down further from the economy and industry level factors. Companies tend to differentiate themselves in a variety of ways like profitability, efficiency, leverage etc. FMCG and IT have done better due to lower leverage compared to steel or infrastructure. Some of the key company level factors to be considered in valuing a company include; Management quality, Corporate governance, Financial ratios, Leverage ratios, Growth ratios, Efficiency ratios, Solvency ratios, Profit margins, Return on capital, Market share, Yield per customer, Yield per employee, Competitiveness, Technical finesse, Investment in R&D, Margin Sustenance, Commodity dependence, Cash flows, Business edge, Pedigree etc. The company-level factors are normally a mix of quantitative and qualitative factors where a high level of judgment is called for.

diksha shahanswered.