Chapters in Fundamental Analysis
Chapter 7 of 7 · 5 min read
Sector analysis and relative valuation
Why sectors lead and lag, and how to compare a company with its peers.
Sectors move in cycles tied to rates, commodities, currency and policy. Banks like rising credit growth; IT benefits from a weaker rupee; autos from falling fuel prices and rural demand.
Relative valuation
Compare a stock with sector peers on growth, margins, returns and multiples. A premium needs a reason: better growth, higher returns, a stronger balance sheet.
Rotation
Leadership rotates as conditions change. Sector performance and breadth show where money is flowing right now.
Key takeaways
- Sector context explains a large share of a stock's move.
- Compare like with like; premiums need justification.
- Watch rotation through performance and breadth.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
- Shock transmission and scenario analysis · Macro & Economy
Education only, not investment advice. Updated 2026-10-09.