How to become Financial Analyst in India?

How to become Financial Analyst in India?

6 mins read3.1K Views Comment
Updated on Oct 5, 2023 09:56 IST

Financial analysts analyze company’s financial data to make decisions of the company regarding investments and its portfolio. These analysts carry out data mining to extra important information to advise on whether to buy/sell company’s stocks, bonds and other investments.
Author: Bhanvi Arora

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In this blog, we will discuss details to understand how to become a financial analyst in India. We will cover the following topics:

Table of Content

Who is a financial analyst?

Financial analyst is a professional responsible for analyzing past and present financial data of a company in order to evaluate future revenues and expenditure. These professionals estimate the return on investment on stocks, gather financial data taking into account company’s goals, reduce costs and improve financial performance. They usually work in securities firms, banks, insurance companies, mutual funds, pension funds, venture capital firms, government agencies and similar organizations. 

Explore finance courses

Job Responsibilities of Financial Analysts

Financial analysts have the following job responsibilities:

  • Analyzing previous and current financial data of an organization for estimating future expenses and revenues. 
  • Performing financial functions including auditing, planning, budgeting, assessing, cost, and project control.
  • Evaluating depreciation, proposals, rate of return, investment opportunities, operating records, and financial statements. 
  • Studying financial data for providing data on investments and financial strategies. 
  • Organizing data to perform analysis using financial metrics, including earnings per share, return on equity, yearly growth, etc. 

Explore free financial analyst courses

How to become a financial analyst?

There are several ways in which you can become a financial analyst in India. You need to start preparing for your career well in advance.

  • School-level preparation: One should successfully complete 10+2 with commerce or science. Having mathematics or accounting as subjects in class 12th will make it easier to clear certifications. 
  • Undergraduate preparation: After the completion of the 12th standard, you need to get admission in a bachelor’s degree program. Several universities offer a bachelor’s degree in BBA-Finance and BCom which are suitable courses to become a financial analyst. They offer admission on the basis of the percentage secured in class 12th.
  • Postgraduate preparation: After completing BBA/B.Com, you can start preparing for MBA/M.com, which will increase your salary package. MBA is a 24-month long programme offered by several universities, and candidates can choose specializations such as finance, retail management, marketing, etc. You can also choose to work in the finance industry for a few years after graduation and then pursue Master’s degree in a relevant specialization. 
  • Work experience: If you are a working professional, you need to have at least 1-2 years of experience in any finance-related field to become a financial analyst. 
  • Gain relevant certifications: You can get certified and start working as a financial analyst in India. 
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Certifications Required to Become Financial Analyst

Listed below are a few financial analyst courses programs that you can explore:

1. Certified Financial Planner (CFP)

This certification is meant for expert financial planners. It shows the professional’s honesty, ability, ethics and thoroughness pertaining financial matters. The CFP exam comprises 170 multiple-choice questions on financial planning, investment, tax planning, risk management, etc. 

2. Certified Investment Management Analyst (CIMA)

This certification is given to financial planners, financial analysts and wealth management professionals. The candidate needs to have atleast 3 years of work experience, complete the CIMA education programme, pass a background check and hold a CIMA certificate in business accounting or other relevant qualifications. A five-hour computer-based exam is conducted that has subjects including risk measurement, ethics, investment policy, due diligence, and asset allocation. 

3. Certified Management Accountant (CMA)

Certified Management Accountant (CMA) certification is provided by the Institute of Management Accountants (IMA), USA. Requirements for getting this certification include a Bachelor’s degree or professional accounting certification, two years of work experience, IMA membership and passing both parts of the CMA course within three years of one another. Professionals with CMA certification work as management accountant, Chief Financial Officer, corporate controllers, etc. 

4. Chartered financial analyst (CFA) 

Chartered Financial Analyst is considered highly reputed amongst many financial services and management degrees. It is offered by the CFA Institute, USA. The eligibility for this course is a graduate in any discipline or 4 years of work experience with an international passport. The average CFA course duration is 3-4 years. The course fee ranges between Rs 190,000- 5,86,000.

The course is designed in a manner that candidates can gain in-depth knowledge about investment, portfolio management, financial accounting, equity investments, corporate issuers, ethical and professional standards, and alternative investments, etc. The syllabus comprises of 10 subjects taught across all levels. These three levels include: level 1, level 2 and level 3. The candidates can move to the next level only if they pass the previous level. The passing percentage of the CFA exam is relatively low which ranges between 40-50%.

Check out CFA eligibility in detail

Skills Required to Become Financial Analyst in India

You need to develop several skills to become a good financial analyst. Some of these include:

  1. Problem-solving skills: A good financial analyst is a problem-solver. You should be able to solve company’s debt problems easily to steer away from a crisis. You should be able to handle financial issues to gain investors’ confidence.
  2. Analytical skills: This means that the analyst should be able to gather data and analyze it effectively. An analyst should be expert in excel and maintaining database for presentation. Analysts might have to compare several companies’ results as part of the job and therefore, analytical skills are very important.
  3. Financial modeling: An analyst should be good with financial modeling wherein he/she should have knowledge about different types of financial models, including merger and acquisition, IPO modeling etc.
  4. Communication skills: Financial analysts should have good written and oral communication skills. They need to present financial information to their clients which require excellent communication skills. They should be able to make complex financial jargon simpler for their clients. 
  5. Mathematical skills: Analysts also need to have excellent mathematical skills, including analysis of financial statements, probability, mental math, statistics, etc. Financial analysts need to do a lot of number crunching and therefore, good mathematical skills are necessary.
  6. Accounting skills: You need to have knowledge of accounting to work efficiently in finance. You should be well versed with accounting principles, standards and techniques, calculating budgets, cost analysis and reduction, managing cash flow and a general ledger, bank statements, accounting programs and the mathematical formulas involved in these calculations.

Explore Free Online Courses with Certificates

Remunerations for Financial Analysts

The demand for financial analysts is quite high in the finance industry. For professionals with a work experience between 1-7 years, the annual salary ranges from Rs 2 lacs- 10 lacs. Financial analyst salary averages around rupees 4 lakh in India.

Summing up

There is immense scope of a successful career as a financial analyst. It is one of the most sought after professions since it involves critical decision making skills for a business’s financial position. A good financial analyst must be able to evaluate the company’s overall strengths, weaknesses, investments and growth plans. Reports suggest that there are various job opporttunities available in India for financial analysts. Certified financial analysts can work with multi-national corporations, private as well as government sector. 

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