Glossary

Stock market terms, explained simply

Every number on an Indian company’s page comes from a filing, and filings have their own vocabulary. These are the 50 terms you will meet most often on EquityTale, in everyday language — written for someone reading their first balance sheet, not for someone who already knows.

Valuation — what a share costs

The numbers that describe the price you pay, rather than the business you are buying.

Market cap: The company's total value on the market — share price × number of shares. Tells you how big the company is. Learn: The P/E Ratio. Learn: What Actually Happens in an IPO.
P/E ratio: Price ÷ earnings per share. Roughly how many years of current profit you pay for the stock. Higher can mean pricier — or faster-growing. Learn: Why One Number Is Never Enough. Learn: The P/E Ratio. Learn: The Offer Documents.
P/B ratio: Price ÷ book value per share. How much you pay for each ₹1 of the company's net worth. Learn: The P/E Ratio. Learn: Return on Equity, and What It Hides.
Book value: The company's net worth per share — assets minus liabilities, divided by the number of shares. Learn: What the Company Owns and Owes. Learn: Return on Equity, and What It Hides. Learn: The Offer Documents.
EPS: Earnings per share — profit divided by the number of shares. Shown for the latest quarter, as the company reported it. Learn: What the Company Earned. Learn: The P/E Ratio. Learn: The Offer Documents.
Face value: The nominal value of one share in the books (e.g. ₹10). It is not the market price. Learn: What Actually Happens in an IPO.
DCF model: Discounted cash flow: project the company's future free cash flows, then convert them into today's money using a required return. A disclosed set of assumptions, not a prediction.
Margin of safety: How far the market price sits below the model's value. Value investors want a 20–30% cushion so estimation errors don't hurt.

Profitability — what the business earns

How much money the company actually makes, and how efficiently it makes it.

Revenue: Money earned from the core business, before any costs are taken out. Learn: Where These Numbers Come From. Learn: What the Company Earned. Learn: Which Part of the Business Earns.
Profit before tax: Profit left after all business expenses but before income tax. Learn: What the Company Earned.
Net profit: The bottom line — what's left after every expense and tax. Also called PAT. Learn: What the Company Earned. Learn: Where the Money Actually Went.
Net margin: Profit as a share of sales. A 9% margin means ₹9 kept as profit from every ₹100 of revenue. Learn: What the Company Earned. Learn: Where the Money Actually Went. Learn: Which Part of the Business Earns. Learn: Why One Number Is Never Enough.
ROE: Return on equity — profit as a share of the owners' money. Above ~15% is generally strong. Learn: Why One Number Is Never Enough. Learn: Return on Equity, and What It Hides. Learn: The EquityTale Health Score. Learn: The Offer Documents.
ROCE: Return on capital employed — profit (before interest and tax) as a share of all capital used. Shows how efficiently the business turns money into profit. Learn: Why One Number Is Never Enough. Learn: Return on Equity, and What It Hides.
Operating cash flow: The actual cash the core business generated. Healthy, positive operating cash flow means profits are turning into real money — not just paper. Learn: Where the Money Actually Went.
Free cash flow: Cash the business generated minus what it spent on plants, machinery and other long-term assets. Profits can be massaged; this is the cash actually left over. Learn: Where the Money Actually Went.

Debt — what the company owes

Borrowing is not automatically bad. How much, relative to what the owners put in, is the question.

Debt to equity: Total borrowings versus what the owners have put in. Below ~0.5 is comfortable; above ~1 means the company leans heavily on debt. Learn: What the Company Owns and Owes. Learn: Return on Equity, and What It Hides. Learn: The EquityTale Health Score. Learn: Promoter Pledge.
Total debt: All borrowings, short- and long-term. Lower relative to equity and cash is safer. Learn: What the Company Owns and Owes.

Ownership — who holds the shares

Filed with the exchanges every quarter. Who owns a company, and whether they are buying or selling, is often the most informative thing on its page.

Promoter: The founders or main owners who control the company. A high, steady promoter stake is usually a good sign. Learn: The EquityTale Health Score. Learn: Who Owns the Company. Learn: Promoter Pledge. Learn: What Actually Happens in an IPO. Learn: Lock-In Periods.
FII: Foreign institutional investors — overseas funds that hold shares. Learn: Who Owns the Company.
DII: Domestic institutional investors — Indian mutual funds, insurers and banks. Learn: Who Owns the Company.
Public: Retail investors and other small shareholders. Learn: Who Owns the Company. Learn: Lock-In Periods.
Mutual funds and other big investors: Mutual funds, insurance companies, pension funds and foreign investors. They have full-time analysts studying the company, so how they vote is the most informed opinion on the share register. Companies call them 'public institutions'. Learn: What Shareholders Actually Vote On.
Small shareholders: Everyone who isn't a promoter or a big fund — mostly individual investors like you, plus smaller companies. Learn: What Shareholders Actually Vote On.
Promoter pledge: Shares the promoters have pledged as collateral for loans. A high pledge is a risk flag — if a loan sours, those shares can be dumped. Learn: The EquityTale Health Score. Learn: Who Owns the Company. Learn: Promoter Pledge.
Insider trade: Buying or selling by the company's own promoters, directors or employees, disclosed under SEBI rules.
Bulk deal: A large single trade (over 0.5% of shares) that exchanges must disclose the same day.

Governance — how decisions get made

Shareholders vote on major decisions and the counts are filed with the exchange. These terms are what those filings use.

Needed over half the votes: Everyday decisions — approving the accounts, re-appointing a director — pass if more shares vote yes than no. Companies call this an 'ordinary resolution'. Learn: What Shareholders Actually Vote On.
Needed 75% approval: Bigger decisions — issuing new shares, share-award schemes, changing the company's rules — need three times as many yes votes as no votes. Companies call this a 'special resolution'. Learn: What Shareholders Actually Vote On.
Independent vote counter: A qualified outsider who counts the votes and certifies the result, so the company cannot report its own numbers. The certified result is filed with the stock exchange within two working days. Learn: What Shareholders Actually Vote On.
Passed only because promoters voted yes: The proposal was approved, but if you remove the promoters' own votes it would have been rejected. Both figures come straight from the company's filed vote counts — what you make of it is your call. Learn: What Shareholders Actually Vote On.
Auditor's opinion: An independent auditor certifies the accounts. A clean (unqualified) opinion means no reservations; a qualified, adverse or disclaimed opinion is a serious warning about the numbers themselves. Learn: Where These Numbers Come From.

Raising money — and what happens to it

When a company raises capital it must say what the money is for, then report what it spent.

Money spent on something else: A company that raises money must say what it is for, and then report every quarter how much of each purpose it has paid for. If it uses the money differently, it has to say so — this flag is the company's own answer on its own filing, not a judgement of ours.
An outside agency watching the spending: For larger fundraises the company must appoint an independent credit-rating agency to check the money is going where it said, and report to the exchange every quarter.

Saving, borrowing and tax

The vocabulary behind the calculators — what your money actually earns once tax and inflation have been counted, and what borrowing really costs.

SIP: Systematic Investment Plan — a fixed amount into a mutual fund every month. Each instalment buys at whatever the price is that month, and each one carries its own tax clock. SIP calculator. Learn: How a SIP Is Taxed.
SWP: Systematic Withdrawal Plan — the reverse of a SIP. You take a fixed sum out each month while the rest stays invested, which is how a retirement corpus is usually drawn down. SWP calculator. Learn: How a SIP Is Taxed.
Compounding: Earning returns on your returns. It does almost nothing in the early years and almost everything in the later ones, which is why time in the market matters more than the amount. Watch compounding over any period.
Inflation: The rate at which prices rise, so the same money buys less each year. India's long-run average is around 6% — which is why a 7% return is closer to break-even than it sounds. See what inflation does to a fixed deposit.
Real return: Your return after inflation — what the money can actually buy, rather than how many rupees it becomes. A 7% return with 6% inflation is a real return of about 1%. Work out the real return on a SIP.
XIRR: The annual return on money paid in and taken out at irregular times. A plain average cannot handle that, because a rupee invested last year has not worked as long as one from a decade ago. See it applied to a SIP.
Long-term capital gains: Profit on something held beyond a year. On listed shares and equity funds that means more than 12 months, taxed at 12.5% above ₹1.25 lakh of gains in a financial year. See the tax on a SIP, instalment by instalment. Learn: Tax on Shares and Equity Funds. Learn: How a SIP Is Taxed.
Short-term capital gains: Profit on something sold within a year, taxed at 20% on equity — no exemption. Every SIP has some, because the most recent instalments have not been held long enough. See which instalments are still short-term. Learn: Tax on Shares and Equity Funds. Learn: How a SIP Is Taxed.
TDS: Tax Deducted at Source — tax the payer withholds before paying you. Banks deduct 10% on deposit interest once it crosses ₹50,000 in a year (₹1 lakh for senior citizens). See when TDS starts on a deposit. Learn: Tax on Shares and Equity Funds.
Tax slab: The rate charged on your last rupee of income. It decides what deposit interest really pays you, and 4% cess is added on top — so a 30% slab actually costs 31.2%. See what your slab does to a deposit. Learn: Tax on Shares and Equity Funds.
EEE: Exempt-Exempt-Exempt — untaxed going in, untaxed while growing, untaxed at maturity. PPF and Sukanya Samriddhi are the main examples, which is why they beat higher-rate deposits. PPF calculator.
Lock-in: How long your money cannot be withdrawn. PPF locks in for 15 years and Sukanya Samriddhi for 21, so neither is an option for a goal that arrives sooner, whatever the rate. Compare schemes by horizon and lock-in. Learn: What Actually Happens in an IPO. Learn: Lock-In Periods.
EMI: Equated Monthly Instalment — the fixed amount you repay each month. Early on it is mostly interest; the principal only starts to dominate well past the halfway point. Home loan EMI calculator.
Flat vs reducing rate: A reducing rate charges interest on what you still owe. A flat rate charges it on the original amount for the whole tenure, ignoring everything repaid — which makes 10% flat closer to 18%. Convert a flat rate to its real rate.

Reporting basics

Two terms that change what every other number on a page means.

Consolidated: Financials that fold in all subsidiaries, not just the parent company (which is 'standalone'). Learn: Where These Numbers Come From. Learn: What the Company Owns and Owes. Learn: Which Part of the Business Earns.
Dividend: Cash a company pays out to shareholders from its profits.

See these numbers on a real company

Every term above appears on the company pages, with the filing it came from. Browse all listed companies A–Z or filter them by the metrics defined here.

These definitions are written to be understood, not to be exhaustive, and they describe how EquityTale uses each term. Where a term has a precise regulatory meaning under SEBI or Companies Act rules, the filing itself governs. Nothing here is investment advice.