Sector Analysis for [industry] — Stock-picking Framework

This is the assembled prompt after inserting any variables you filled in. Placeholders that are not filled remain in [brackets]. You can optionally edit the prompt below without changing the variable inputs.

### Title

Sector Analysis for [industry] — Stock-picking Framework

### Validate Inputs

**Missing or ambiguous items (listed):**

- Exact market geography/scope (India, global, or specific market).
- Specific data sources allowed (paid terminals, company filings, government reports).
- Exact numerical timeframe for analysis (start/end dates).
- Preferred output length or file type beyond Markdown.
- Whether the model should suggest specific stock tickers or only sector-level guidance.

**Assumptions (proceeding without additional questions):**

- Default market scope: India unless the user specifies otherwise.
- Default historical window and projection: use the last 5 years for historical trends and a 3-year projection for forward-looking statements if `[timeframe]` is not supplied.
- Default audience: professional investor / analyst if `[audience]` is not supplied.
- The model must not provide personalized financial advice and must include a compliance disclaimer.

> No clarifying questions will be asked; the model must proceed using the explicit assumptions above.

### Required Inputs (provided / inferred)

- **Goal and Success Criteria**

  - Goal: Produce an actionable sector analysis for `[industry]` that supports stock-picking decisions.
  - Success measured by: (a) a concise Executive Summary with top 3 investible theses and one-line recommendation each; (b) a quantified risk checklist; (c) a ranked list of 1–5 investible sub-segments or company types; (d) clearly cited data and dated sources.

- **Task Type**: Analysis / Research / Reasoning with structured content creation (investment research brief).

- **Model Role/Persona**: Senior Equity Sector Analyst — concise, evidence-driven, investment-grade voice.

- **Tone/Style**: Formal, objective, technical, concise. Avoid first-person narrative and unsupported claims.

- **Constraints**:

  - Length targets (see Constraints section).
  - No personalized financial advice.
  - Cite sources and include retrieval dates.
  - Show calculations for any quantitative claims.

- **Required Sections**: Executive Summary; Sector Overview; Value Chain; Customer Segments; Macroeconomic Relevance; Market Size & Growth; Competitive Landscape; Key Financial Metrics; Regulatory & Policy Environment; Trends & Catalysts; Risks; Valuation vs Cycle; Investment Thesis & Trade Ideas; Data & Assumptions; Sources & Appendix.

- **Resources/Context**: Use only the delimited Context block below as provided reference for framework. Supplement with up-to-date data where possible and cite all sources.

- **Output Format**: Markdown, structured headings, tables for numeric data, and a short public rationale paragraph. Active voice, present tense.

- **Examples Provided**: None supplied. The model should follow the section templates below.

- **Reasoning Visibility**: Suppress private chain-of-thought. Provide a brief public rationale (≤200 words) explaining top choices and key assumptions.

- **Safety/Compliance**: Include clear disclaimer that the output is informational, not personalized financial advice; do not fabricate data or cite inaccessible proprietary content.

- **Missing-Input Behavior**: Do not pause for clarifications. Use the explicit assumptions above and annotate where assumptions replace missing data.

- **Visuals Required?** No.

### Context (delimited)

"""
I want to analyze the sector/industry for stock picking based on following points:

1. Understand the Sector Dynamics
   What does the sector do? Break down the value chain (suppliers → producers → distributors → customers).
   Who are the customers? Are they individuals (B2C), enterprises (B2B), or the government?
   Is demand essential or discretionary? E.g., FMCG is non-cyclical, auto is cyclical.

2. Macroeconomic Relevance
   GDP correlation: Does sector growth rise faster or slower than GDP?
   Cyclicality: How does the sector perform in downturns (defensive vs. cyclical)?
   Interest rate sensitivity: E.g., banks, NBFCs, and real estate are heavily rate-sensitive.

3. Market Size and Growth Potential
   TAM (Total Addressable Market): How large is the industry?
   Growth Rate: Historical CAGR and projected CAGR.
   Penetration levels: High-penetration sectors (telecom) vs. underpenetrated sectors (insurance in India).

4. Competitive Landscape
   Market leaders: Top 3–5 players and their market share.
   Consolidation vs. fragmentation: Few large players = higher pricing power.
   Foreign vs. domestic players: Does the sector rely on imports or is it export-oriented?

5. Key Financial Metrics
   Revenue growth trends for leading companies.
   Margins: Gross and operating margins—are they expanding or compressing?
   Return Ratios: ROE, ROCE (capital efficiency matters by sector).
   Valuation multiples: P/E, EV/EBITDA compared with historical averages.

6. Regulatory and Policy Environment
   Government push or control: E.g., renewable energy is incentivized, but telecom has heavy regulation.
   Taxation/subsidies: Can change competitiveness quickly.
   Entry barriers: Licensing, capital intensity, intellectual property.

7. Trends and Catalysts
   Structural shifts: Digitalization, urbanization, demographic changes.
   Technological disruption: E.g., EVs for auto, AI for IT services.
   Global factors: Commodity prices, exports/imports, geopolitical risks.

8. Risks
   Commodity price dependency (metals, oil).
   Currency fluctuations (IT, pharma exporters).
   Regulatory shocks (NBFCs, telecom).
   Disruption risk from new entrants or substitutes.

9. Valuation vs. Cycle
   Place the sector in its cycle: early growth, maturity, or decline.
   Expensive sectors in euphoria (like IT in 2021) often see correction.
   Depressed sectors (like infra in 2015–2018) can offer long-term opportunities.
   """

### Task Instructions

- Produce a single, shareable Markdown sector brief for `[industry]` covering `[timeframe]`, tailored to `[audience]`. Follow the exact Output Format below.
- Start with an **Executive Summary (150–250 words)**: 3 top investible theses (labelled Thesis 1 / 2 / 3), one-sentence bullet recommendation per thesis, and one-sentence top risk.
- For each required section in Required Sections, deliver concise, evidence-driven paragraphs (100–300 words per section) and include at least one quantitative datapoint where applicable.
- **Value Chain**: Map suppliers → producers → distributors → customers. Use a simple flow bullet list or ASCII diagram.
- **Customer Segments**: State whether primary demand is B2C, B2B, or government and estimate percent revenue split if possible.
- **Macroeconomic Relevance**: Provide GDP correlation, cyclicality classification (defensive / cyclical), and interest-rate sensitivity rationale.
- **Market Size & Growth**: Provide TAM estimate, historical CAGR (last 3–5 years), projected CAGR for next 3 years, and penetration commentary. Show calculation steps and assumptions.
- **Competitive Landscape**: List top 3–5 players, estimated market shares (percent), consolidation level, and import/export exposure.
- **Key Financial Metrics**: For top 3 listed companies, show a table with: Revenue CAGR (3yr), Gross Margin, Operating Margin, ROE, ROCE, and current P/E or EV/EBITDA. Indicate units and fiscal year ends.
- **Regulatory Environment**: Summarize current policy levers, likely near-term regulatory risks, and how regulation affects margins/entry barriers.
- **Trends & Catalysts**: Bullet short-term catalysts (12 months) and medium/long-term structural trends (3+ years).
- **Risks**: Provide a ranked list of top 5 sector risks and a one-line mitigation/monitoring action for each.
- **Valuation vs. Cycle**: Place sector on cycle map (early growth / peak / maturity / decline) and justify using at least two quantitative indicators (e.g., revenue growth vs. historical, multiples vs. 10-yr average).
- **Investment Thesis & Trade Ideas**: For each of the 3 theses provide: bull, base, bear scenarios with triggers and a suggested exposure level (e.g., overweight / market weight / underweight) for `[audience]`.
- **Data & Assumptions Appendix**: List all data points, source links, retrieval dates, and explicit numeric assumptions used in projections.
- **Sources**: End with a numbered list of all cited sources with full URLs and retrieval dates.
- If live data retrieval is possible, the model must fetch and cite current filings, macro data, and consensus estimates. If not, clearly label modeled/estimated figures and show the arithmetic.

### Constraints and Rules

- **Scope**: Focus strictly on `[industry]`. Do not produce company-level buy/sell orders unless asked. Public tickers may be named for illustration.
- **Length**: Full brief target 1,200–2,000 words. Executive Summary 150–250 words. Each subsection 100–300 words. Tables allowed; keep table widths suitable for Markdown.
- **Tone/Style**: Formal, concise, evidence-based. Avoid first-person and value judgments without data.
- **Compliance**: Include this exact disclaimer line near top: "This document is for informational purposes only and does not constitute financial or investment advice." Do not claim insider access or proprietary data you cannot cite.
- **Proficiency/Reading Level**: Practitioner / professional investor.
- **Citations**: Every non-trivial factual/quantitative claim must have a citation. Prefer primary sources (company filings, official statistics) and provide retrieval dates.
- **Math Transparency**: Show steps for CAGR, TAM, and valuation calculations. Use plain arithmetic in-line or a small calculation table.
- **No Fabrication**: If a datum is unavailable, state "estimate" and provide the assumption and method.

### Output Format

- **Medium**: Plain Markdown text.
- **Exact Structure** (order and headings must match):

  1. Title (use the Title line provided)
  2. Compliance Disclaimer (exact line above)
  3. Executive Summary (150–250 words)
  4. Sector Overview
  5. Value Chain (diagram/list)
  6. Customer Segments
  7. Macroeconomic Relevance
  8. Market Size & Growth (with calculations)
  9. Competitive Landscape
  10. Key Financial Metrics (Markdown table with clearly labeled columns and units)
  11. Regulatory & Policy Environment
  12. Trends & Catalysts
  13. Risks (ranked)
  14. Valuation vs. Cycle
  15. Investment Thesis & Trade Ideas (3 theses with scenarios)
  16. Data & Assumptions Appendix (numbered)
  17. Sources (numbered with retrieval dates)

- **Voice/Tense**: Active voice, present tense.
- **Terminology/Units**: Use INR for Indian scope by default; otherwise use the local currency and state it. Express percentages with one decimal (e.g., 12.3%) and CAGR with 2 decimals if possible.

### Photo Briefs (not included)

Visuals are not required for this brief. Do not produce image briefs.

### Evaluation Criteria (self-check before returning)

- The brief uses only bracketed placeholders `[industry]`, `[timeframe]`, `[audience]` (no other brackets remain).
- All three placeholders appear in the frontmatter `placeholders` array exactly as plain strings.
- Executive Summary contains exactly 3 investible theses and one-line recommendations.
- Each required section is present and ordered exactly as specified.
- All quantitative claims include sources and retrieval dates or are clearly labeled as estimates with methods shown.
- Calculations (CAGR, TAM, valuation comparisons) are shown step-by-step.
- Compliance disclaimer is present verbatim.
- Tone and length constraints are respected.
- Final output is valid Markdown and ready to share with `[audience]`.

### Optional Reasoning

Do not reveal private chain-of-thought. Instead provide a short public rationale (≤200 words) explaining the logic behind the top 3 theses and the main assumptions used for projections.

### Final Check (required)

- Confirm placeholders: `[industry]`, `[timeframe]`, `[audience]` are bracketed consistently in the body and listed in frontmatter placeholders.
- Confirm Context block above is treated as reference data only.
- Confirm no clarifying questions will be asked; proceed using the listed assumptions.
- Confirm the deliverable is Markdown, follows the exact section order, and includes citations and calculations.

### Assumptions (repeated for clarity)

- Market scope default: India unless specified.
- Timeframe default: last 5 years (historical) and 3 years (projection) if `[timeframe]` is not supplied.
- Audience default: professional/institutional investor if `[audience]` is not supplied.