Lesson 09 — How to Compare Companies

What you'll do

A number on its own says little; next to a competitor's it starts to mean something. You will put two companies side by side and read the result.

Step by step

1. Click Compare in the sidebar (/compare). The page is called Compare Stocks.
2. In Search & add company, type a name and pick it from the list. Add a second company from the same sector, for example HDFC Bank and ICICI Bank. You can add up to 10, and the bin icon on a company's card (Remove) drops one.
3. Set Report (Consolidated or Standalone) and Period (Annual or Quarterly). They apply to every company, so you are comparing like with like (Lessons 02 and 04).
4. Read the summary cards first. Each shows the price, the 1-year change, P/E (price compared with a year's profit), ROE (profit earned on owners' money) and D/E (borrowing compared with owners' money).
5. Scroll to Detailed Comparison. Rows are grouped into Price & Returns, Valuation, Profitability, Growth, Per-Share Data, Leverage & Liquidity and Cash Flow & Quality. In each row the strongest value is shaded green and the weakest light red. When all your companies share a sector, a ★ Key metrics line shows which rows matter most for it.
6. Click the tune icon (Pick your own metrics) to see only the rows you choose, and use Metric Trends Over Time to chart up to five metrics across the years. Click a company's name in the table heading to open its page.

Why this matters

Every kind of business has its own normal. A bank and a software firm carry very different margins and debt, so comparing them tells you little. Peers in one sector show you what is typical, and the shading is only a cue to look closer, not a verdict.

Related lesson: Lesson 02 — Standalone vs Consolidated

Key takeaway

Numbers mean more beside a peer from the same sector. Always check the period and report type before reading a gap between two companies. "Barabar wale se tulna karo."

Try it