How to Conduct an Industry Analysis: PART 1

Industry analysis is the process of evaluating the external factors that affect a particular industry, its growth potential, competitive landscape, and risks. It helps investors understand whether a company operates in a favorable environment or faces challenges that could impact its performance. 1. Define the Industry Scope Before analyzing, clearly define: Industry Type: Manufacturing, Services, Technology, etc. Sub-Sectors: For example, in finance—banking, insurance, asset management. Geographic Market: Is the industry global, national, or regional? 2. Analyze Industry Growth Trends Key questions: - Is the industry growing, stagnant, or declining? - What are the key growth drivers? - What is the expected CAGR (Compound Annual Growth Rate)? Where to Find Data? Government Reports (RBI, SEBI, Ministry of Commerce) Industry Research Reports (McKinsey, Deloitte, CRISIL, IBEF) Company Investor Presentations News & Trade Publications Example: The Indian EV Industry is expected to grow at a CAGR of 36% between 2022-2030 due to government incentives and rising fuel prices. The IT Industry in India has a stable CAGR of 7-9% due to global outsourcing demand.