📊 NISM Series XVChapter 6 of 15⚖ 8 marks weightageCase-Based ✓
Ch.6: Industry Analysis
Practice questions for NISM-Series-XV: Research Analyst Certification Examination
(mandated by SEBI under the Research Analysts Regulations, 2014).
Chapter 6 carries 8 out of 100 marks
in the final examination. The exam has 80 MCQs + 5 case-based sets, 120-minute duration,
60% passing score, and −0.25 negative marking per wrong answer.
46
MCQ
2
Case Sets
54
Total Qs
8
Exam Marks
60%
Pass Score
−0.25
Neg. Marking
What You Will Learn in This Chapter
Apply Porter's Five Forces and other industry analysis frameworks
Understand industry life cycles and key performance indicators
Know how to assess regulatory environment and competitive landscape
Key Terms:Porter's Five Forcesindustry life cyclemarket sizingcompetitive landscapeindustry KPISWOT
Chapter 6 in 10 minutes: industry analysis
Industry analysis sits between economic analysis and company analysis. Economic analysis asks whether the economy will grow. Industry analysis asks how each industry will fare in that economy, how big it can get, and how hard its players must compete. NISM XV questions on this chapter test definitions, the frameworks (Porter, PESTLE, BCG, SCP) and simple market-sizing sums.
1. Industry, business sector, economic sector
Term
Meaning
Example
Industry
Firms meeting the same customer need with similar products
Steel, telecom, insurance
Business sector
A group of related industries
Financial services (banking, insurance, rating)
Economic sector
A segment of national income or output
Agriculture, manufacturing, services
Defining the industry is step one. Codes such as NIC, GICS (sectors → industry groups → industries → sub-industries) or NAICS help, but they can lump unlike businesses together. A cinema chain may belong in cinema, entertainment media or out-of-home entertainment. Choose the group that shares the company's real business drivers.
2. Cyclicality
Defensive: low income elasticity, barely moved by the cycle (food, healthcare, agri inputs).
Semi-cyclical: moves with the cycle but keeps base demand (consumer durables).
Deep cyclical: sales collapse in recessions and jump on recovery (capital goods, steel).
3. Market sizing
Top-down starts from macro or population data (patients × spend per patient). Bottom-up adds up company revenues. Watch the unorganised share: if organised firms earn ₹24,000 cr and the unorganised sector is 20% of the market, the market is ₹24,000 ÷ 0.8 = ₹30,000 cr, not ₹28,800 cr.
4. Secular trends, value migration, life cycle
Secular trends are long-term shifts driven by technology, income levels, demographics, culture and tastes, or regulation. They move value between players:
Value migration
Example
Geographic
Shale gas favoured US oil producers
Cross-industry
Digital cameras over film rolls
Across the value chain
Telecom price war helped digital content providers
Within an industry
Smartphone makers over Blackberry
Life cycle: pioneering → growth → mature → declining → (rarely) reinvention and revival.
5. Frameworks
Porter's five forces (1979): horizontal forces are rivalry, substitutes and new entrants; vertical forces are supplier power and buyer power. An attractive industry has low competition, high entry barriers, weak suppliers and buyers, and few substitutes.
PESTLE: Political, Economic, Socio-cultural, Technological, Legal, Environmental. Adding Ethics and Demographics makes STEEPLED. Mostly used to compare countries.
BCG matrix: stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share), dogs (low growth, low share).
FTEs billed, revenue per FTE, attrition, constant-currency growth
Retail
Store count, same-store sales growth
Telecom
ARPU, churn, acquisition cost, market share
7. Regulation and taxes
Small rule changes can reshape an industry. A direct tax (income tax) is borne and paid by the same person. An indirect tax (GST) is collected by the seller but borne by the buyer. Stamp duty raises asset purchase costs, and STT on securities sales discourages short-term trading.
Summary written by BullWiser from the NISM Series XV workbook (February 2026 edition), Chapter 6. Always refer to the current NISM workbook before your exam.
Multiple Choice Questions (46)
Q1MCQEasyRole of industry analysis
Economic analysis tells an analyst whether the economy is likely to grow or slow. What does industry analysis add?
AThe country's future GDP growth rate
BThe fair value of one company's shares
CThe quality of one company's management
DHow each industry is likely to be affected by those economic conditions
Q2MCQEasyDefinitions
Which is the best description of an 'industry'?
AA broad group of related industries such as financial services
BA segment of the economy that contributes to national income
CA group of firms selling the same or similar products to meet the same customer need
DAll listed companies in one stock exchange index
Q3MCQMediumDefinitions
Banking, insurance, credit rating and investment banking together form an example of a:
AValue chain
BBusiness sector
CEconomic sector
DSingle industry
Q4MCQMediumDefinitions
Agriculture, manufacturing, public utilities and services are examples of:
AEconomic sectors
BBusiness sectors
CIndustry groups under GICS
DIndustries
Q5MCQEasyDefining the industry
What is the first step in industry analysis?
AStudying the regulatory framework
BDefining the industry the company operates in
CEstimating the market size
DCalculating industry KPIs
Q6MCQMediumDefining the industry
Why may a standard classification such as NIC not reflect the real industry for analysis?
AIt covers only listed companies
BIt is used only for tax purposes
CIt can put businesses with very different dynamics, such as budget and luxury carmakers, in one class
DIt is updated every day
Q7MCQHardDefining the industry
A cinema chain competes with OTT platforms, TV channels, live shows and sports leagues. What risk does a narrow 'cinema exhibitor' definition create?
AIgnoring the company's debt
BBreaching SEBI's research analyst rules
COverstating the company's market share in media
DOverlooking important competitors outside cinema
Q8MCQMediumDefining the industry
How should an analyst classify a company that operates across several industries?
AInto the group that shares the factors actually driving its business
BStrictly as per the NIC code
CAlways into its largest revenue segment
DAlways into the broadest possible sector
Q9MCQMediumClassification systems
GICS is a four-tier classification. Which is the correct order from broadest to narrowest?
ASectors, industry groups, industries, sub-industries
BIndustries, sectors, sub-industries, industry groups
CSectors, industries, industry groups, sub-industries
Industries whose demand changes little when incomes rise or fall are called:
ASemi-cyclical industries
BDefensive industries
CSunrise industries
DDeep cyclical industries
Q11MCQMediumCyclicality
Consumer durables grow in booms and slow in downturns but keep a base level of demand. They are best described as:
ADeep cyclical
BDefensive
CSemi-cyclical
DNon-cyclical
Q12MCQMediumCyclicality
Why do capital goods and steel see sharp jumps in orders when an economy starts recovering?
AThey are defensive industries
BTheir prices are fixed by the government
CThey have low income elasticity
DPent-up demand returns as firms revive capacity expansion plans
Q13MCQMediumMarket sizing
Why does an under-penetrated industry usually have higher growth potential?
AIt has no competition
BIts products are always cheaper
CIts margins are always higher
DThere is more headroom left to grow
Q14MCQMediumMarket sizing
An analyst estimates a therapy's market as number of patients × average spend per patient. Which approach is this?
AValue chain analysis
BTop-down
CPeer comparison
DBottom-up
Q15MCQHardMarket sizing
Three organised tyre makers earn ₹6,000 cr, ₹8,000 cr and ₹10,000 cr. The unorganised sector makes up about 20% of total sales. What is the approximate market size?
A₹30,000 crore
B₹24,000 crore
C₹28,800 crore
D₹48,000 crore
Q16MCQMediumMarket sizing
Why is measuring the current market size often difficult?
ASEBI prohibits market sizing
BOnly the government may publish market size
CMany unorganised or private players do not publish data
DMarket size never changes
Q17MCQEasySecular trends
What are secular trends?
ASeasonal swings in demand within a year
BDaily movements in stock indices
CLong-term trends that shift the production or consumption of goods and services
DShort-term changes in interest rates
Q18MCQMediumSecular trends
Japan's ageing population has reduced per-person beer consumption. Which driver of secular trends does this show?
AChange in income levels
BDemographic change
CTechnological advancement
DChange in government policy
Q19MCQMediumSecular trends
GST made logistics more efficient and reduced the need to buy new commercial vehicles. This secular trend was driven by:
AA change in regulation or government policy
BTechnological advancement
CDemographic change
DChange in culture and tastes
Q20MCQMediumSecular trends
Rising disposable income leads people to switch from cheaper products to premium ones. Which driver is this?
ARegulatory change
BTechnological change
CDemographic change
DChange in income levels
Q21MCQEasyValue migration
What is value migration?
AMoving a company's registered office
BA company's move from one stock exchange to another
CA long-term shift of advantage and shareholder value from some entities to others
DTransferring shares between demat accounts
Q22MCQMediumValue migration
Shale gas discoveries shifted value towards US oil exploration at the cost of other oil producers. What type of value migration is this?
AMigration within the same industry
BGeographic migration
CMigration across the value chain
DCross-industry migration
Q23MCQMediumValue migration
Digital cameras wiped out much of the film-roll industry. What type of value migration is this?
AMigration across the value chain
BMigration within the same industry
CGeographic migration
DCross-industry migration
Q24MCQHardValue migration
Price wars cut telecom companies' value but boosted demand for digital content providers. What type of value migration is this?
AMigration across the value chain
BCross-industry migration
CGeographic migration
DMigration within the same industry
Q25MCQMediumValue migration
Blackberry lost value to other smartphone makers once newer networks let rivals offer similar services. Which type of value migration is this?
AGeographic migration
BMigration across the value chain
CCross-industry migration
DMigration across companies in the same industry
Q26MCQEasyBusiness life cycle
In which stage of the business life cycle does an industry see steep growth as many customers adopt a proven product?
ADeclining stage
BMature stage
CGrowth stage
DPioneering stage
Q27MCQMediumBusiness life cycle
Call taxi services in India grew strongly and then shrank once app-based aggregators arrived. Which stage did app aggregators push call taxis into?
APioneering stage
BDeclining stage
CReinvention and revival
DGrowth stage
Q28MCQMediumIndustry landscape
In an industry with low competition, what usually happens when input costs rise?
ACompanies pass the increase to customers and protect margins
BMargins always fall sharply
CThe government compensates the industry
DCompanies must cut production
Q29MCQMediumPorter's five forces
In Porter's model, which two forces are the 'vertical' forces?
AIndustry rivalry and threat of substitutes
BThreat of new entrants and bargaining power of buyers
CThreat of substitutes and threat of new entrants
DBargaining power of suppliers and bargaining power of buyers
Q30MCQMediumPorter's five forces
Which condition points to HIGH rivalry in an industry?
AA few firms with strongly branded, differentiated products
BHigh switching costs for customers
CMany firms selling similar products with low switching costs
DStrong patents protecting each firm
Q31MCQHardPorter's five forces
Which of these makes the bargaining power of suppliers HIGH?
AMany suppliers selling a standard product
BFew suppliers providing a critical input with no close substitutes
CA highly competitive supplier industry
DLow switching costs for buyers
Q32MCQMediumPorter's five forces
Which of these is a barrier to entry that protects existing firms?
ALicensing requirements and patents
BWeak brands
CLow capital needs
DEasy access to distribution
Q33MCQMediumPorter's five forces
Which combination describes an attractive industry for shareholders under Porter's model?
AStrong buyer power and many substitutes
BStrong supplier power and low entry barriers
CHigh competition and low entry barriers
DLow competition, high entry barriers, weak supplier and buyer power, few substitutes
Q34MCQMediumPorter's five forces
Telegrams disappeared after SMS arrived. Which force does this illustrate?
Under PESTLE, which group do forex reserves, central bank monetary policy and dependence on imported oil belong to?
ATechnological factors
BLegal factors
CEconomic factors
DPolitical factors
Q37MCQMediumPESTLE
A retrospective tax demand and sudden cancellation of licences would worry investors under which PESTLE factor?
ALegal
BSocio-cultural
CTechnological
DEnvironmental
Q38MCQMediumBCG matrix
In the BCG matrix, a business in a slow-growing market with a large market share that steadily generates cash is a:
AStar
BDog
CQuestion mark
DCash cow
Q39MCQMediumBCG matrix
A business in a fast-growing market but with a low market share is classified as a:
AStar
BDog
CQuestion mark
DCash cow
Q40MCQHardSCP analysis
In Structure-Conduct-Performance analysis, which element looks at return on equity, return on capital and cost of capital?
AStructure
BPerformance
CConduct
DNone, SCP ignores financial measures
Q41MCQMediumSCP analysis
Whether a business is seasonal or year-round, commoditised or brand-driven, is studied under which part of SCP analysis?
AStructure
BConduct
CValuation
DPerformance
Q42MCQMediumKPIs
Why is revenue per employee a useful KPI for a BPO but less useful for a steel maker?
ASteel makers do not disclose employee numbers
BSEBI bans this ratio for manufacturers
CBPO billing is driven by headcount, while steel is capital-intensive
DBPOs have no other revenue
Q43MCQHardKPIs
Which set of KPIs best suits a telecom operator?
ANet interest margin and CASA ratio
BSame-store sales growth and number of stores
CPassenger-km and occupancy rate
DARPU, subscriber churn, subscriber acquisition cost and market share
Q44MCQMediumKPIs
An industry's growth is limited by its production capacity. Which metric becomes especially important?
ACapacity utilisation
BPenetration rate
CDividend payout ratio
DPrice to book ratio
Q45MCQMediumTaxation
What makes GST an indirect tax?
AIt is paid directly by the consumer to the government
BIt applies only to imports
CIt is levied only on company profits
DThe seller pays it to the government but the end consumer bears it
Q46MCQMediumTaxation
Which tax is paid on the sale of securities and tends to discourage short-term trading?
ASecurities Transaction Tax (STT)
BStamp duty
CCustoms duty
DRoad tax
Want more practice? These 46 questions cover the whole chapter. Take a free full-length XV mock in the real exam pattern to test every chapter together. Start free XV mock exam →
Case-Based Questions (2 sets)
Case 1Case-BasedIndustry Cyclicality, Secular Trends, Value Migration, and Industry Definition
Ms. Priya Sharma, a research analyst, is evaluating 'AutoTech Components Ltd.,' a publicly listed Indian company. AutoTech primarily manufactures engine blocks, transmission gears, and exhaust systems for Internal Combustion Engine (ICE) vehicles. The automotive sector, generally considered a deep cyclical industry, is currently experiencing moderate growth due to an improving economic outlook. However, a significant shift is underway. The Indian government recently announced aggressive targets for Electric Vehicle (EV) adoption by 2030, coupled with significant subsidies for EV manufacturers and buyers. This has led to a noticeable decline in new ICE vehicle sales growth and a surge in EV sales. AutoTech's management is considering diversifying into EV battery casings and motor components, but this requires substantial R&D and capital expenditure. Ms. Sharma needs to assess the long-term viability of AutoTech's existing business and its potential transition, considering the broader industry dynamics, intense competition from existing players, and the influx of new technology-focused entrants.
Medium Sub-question 1
If Ms. Sharma classifies AutoTech solely under 'Manufacture of ICE Auto Components' using a standard classification system, what is the primary risk she faces in her analysis?
AOverlooking the company's strong brand loyalty in its traditional segment.
BUnderestimating the company's current profitability due to legacy assets.
CFailing to identify significant competition from EV component manufacturers and alternative technologies.
DMisjudging the company's ability to raise capital for diversification.
Hard Sub-question 2
To accurately assess AutoTech's future potential in the evolving EV component space, which market sizing approach would be most appropriate for Ms. Sharma to estimate the potential market for EV battery casings and motor components, and why?
AA bottom-up approach, aggregating data from existing EV component suppliers.
BA top-down approach, starting with government EV targets and projected vehicle sales.
CUsing historical growth rates of the ICE component market as a proxy.
DRelying solely on management's internal projections for EV diversification.
Easy Sub-question 3
Based on the scenario, how would you primarily classify the automotive components industry in terms of cyclicality?
ADefensive industry
BSemi-cyclical industry
CDeep cyclical industry
DNon-cyclical industry
Medium Sub-question 4
The shift from ICE vehicles to EVs, driven by government policy and technological advancements, primarily exemplifies which two concepts from industry analysis?
AMarket sizing and bottom-up approach
BIndustry definition and defensive industries
CSecular trends and value migration
DEconomic sector and industry KPIs
Case 2Case-BasedIndustry Cyclicality, Secular Trends, Market Sizing, and Regulatory Framework
Mr. Rajeev Mehta, a research analyst, is tasked with evaluating 'GreenHarvest Foods Ltd.,' an unlisted Indian company specializing in organic, gluten-free packaged snacks and health beverages. The company operates in a highly competitive and fragmented market, with both large established FMCG players and numerous small, unorganized local producers. Consumers are increasingly health-conscious, particularly the urban youth and middle-aged demographics, driving demand for GreenHarvest's products. However, the sector is also subject to evolving food safety standards and stringent labeling regulations imposed by the Food Safety and Standards Authority of India (FSSAI). While the overall economic growth is stable, disposable incomes are steadily rising, leading to a willingness to spend more on premium health products. Mr. Mehta needs to understand GreenHarvest's industry positioning and growth prospects.
Easy Sub-question 1
Given the nature of organic, gluten-free packaged snacks and health beverages, how would you classify GreenHarvest Foods Ltd.'s industry in terms of cyclicality?
ADeep cyclical industry
BDefensive industry
CSemi-cyclical industry
DNon-existent industry
Hard Sub-question 2
If the FSSAI introduces even more stringent regulations regarding organic certification and ingredient sourcing, leading to higher compliance costs for GreenHarvest Foods and its competitors, this would primarily be considered a change in which aspect of industry analysis, and what potential outcome could it lead to?
AIndustry cyclicality; potential for the industry to become deep cyclical.
BSecular trends; potential for value migration to companies with better compliance infrastructure.
CMarket sizing; potential for a top-down approach to become more accurate.
DIndustry definition; potential for the industry to be reclassified as a niche sector.
Medium Sub-question 3
The increasing health consciousness among urban youth and middle-aged demographics, coupled with rising disposable incomes, represents which two types of secular trends affecting GreenHarvest Foods Ltd.?
ATechnological advancement and value migration.
BDemographic changes and change in income levels.
CRegulatory changes and geographic migration.
DMarket sizing and industry cyclicality.
Medium Sub-question 4
What is the primary challenge Mr. Mehta would likely face when attempting to quantify the current market size for the 'organic, gluten-free packaged snacks and health beverages' industry in India?
ALack of historical data for premium products.
BDifficulty in identifying the average expenditure per customer.
CPresence of many unorganized players and private companies whose data is not publicly available.
DOverestimation due to high growth rates in the premium segment.
About this content: These practice questions are based on the
NISM-Series-XV: Research Analyst Certification Examination Workbook (February 2026)
published by the National Institute of Securities Markets (NISM), Mumbai.
NISM is a SEBI-established institution. Questions cover Industry Analysis with verified answers and explanations.
BullWiser is an independent exam preparation platform — not affiliated with NISM or SEBI.
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