This synopsis describes the methodology behind the Economic Times (ET) Stock Reports Plus rating system. Powered by Refinitiv data, it provides an institutional-grade quantitative framework for retail investors.
To help visualize how the system evaluates thousands of stocks, it is easiest to look at the math behind that elusive, perfect 10 on 10 score.
Deconstructing the Perfect 10 Score
The overarching “Stock Score” isn’t a subjective analyst guess; it is an equal-weighted quantitative average of five standalone investment pillars. For a stock to score a perfect 10, it must simultaneously demonstrate operational health, attractive pricing, and strong market backing.
The composite score is calculated using the following basic formula:
Where the five core components are evaluated as follows:
| Pillar | Metric Code | What It Measures | Ideal Indicator for a “10” |
| Earnings | E |
Quality and direction of corporate profits. | Upward revisions by brokers and consistent positive earnings surprises. |
| Fundamentals | F |
Structural financial health. | High ROE/ROCE, strong cash flow generation, and low debt-to-equity ratios. |
| Relative Valuation | RV |
Price attractiveness compared to peers. | Reasonable P/E, P/B, and EV/EBITDA multiples relative to historical averages. |
| Risk | R |
Return volatility and downside stability. | Low beta, high price stability, and minimal sharp drawdowns. |
| Price Momentum | PM |
Market trend and buying pressure. | Strong relative strength index (RSI) metrics and positive long-term moving average alignments. |
The 4% Rule: In a typical volatile market cycle, fewer than 4% of all listed stocks successfully maintain a perfect 10 on 10 score across all five pillars simultaneously.
Because the system re-evaluates data dynamically, these weekly top picks act as an excellent screening tool. They highlight companies where fundamental strength and technical momentum are temporarily in perfect alignment.
