How to Read the SensexIQ Fundamental Scorecard (Step-by-Step)

SensexIQ's fundamental scorecard distills four factors into a single 0-100 number. This guide walks through how the score is constructed, what each factor measures, and the follow-up checks before acting on it.

Step 1 — Open the stock detail page

Navigate to /stock/RELIANCE (or any symbol). The fundamental scorecard appears in the right sidebar on desktop, below the price chart on mobile. The card shows: overall score, label, and four factor bars.

Step 2 — Read the overall score and label

The 0-100 score is the headline. Label mapping:

• 80-100 — Exceptional. Top decile across all four factors. Usually large-cap compounders like HDFC Bank, Asian Paints, Nestle.
• 65-79 — Strong. Quality businesses with one minor weak factor. Most Nifty 50 names sit here.
• 50-64 — Average. Mid-quality. Often cyclicals at cycle middle, or growth names with stretched valuation.
• 35-49 — Below Average. Specific weakness in at least 2 factors. Approach with caution.
• 0-34 — Weak. Multiple structural concerns. Either pre-turnaround opportunity (high risk) or value trap.

Don't act on the headline alone. A 75-score with deep weakness in one factor (say Leverage) tells a different story than a 75-score balanced across all four.

Step 3 — Inspect the four factor sub-scores

Valuation (25% weight)

Combines: trailing P/E, forward P/E (if estimate available), Price/Book, EV/EBITDA, dividend yield. Score normalised against sector median.

• High score (80+) = trading at discount to sector median across multiple metrics
• Low score (under 40) = premium valuation; growth must justify it

Quality (25% weight)

Combines: ROE 3-yr average, operating margin trend, free cash flow consistency, working capital cycle.

• High score (80+) = consistent ROE ≥ 18%, expanding margins, positive FCF
• Low score (under 40) = falling ROE, margin compression, working capital stress

Leverage (25% weight)

Combines: debt-to-equity ratio, interest coverage ratio, debt/EBITDA, cash position.

• High score (80+) = D/E < 0.3, interest coverage > 10x, net cash position
• Low score (under 40) = D/E > 1.5, interest coverage < 3x — distress risk

Growth (25% weight)

Combines: revenue CAGR (3-yr, 5-yr), earnings CAGR, year-over-year quarterly growth, sector growth context.

• High score (80+) = revenue CAGR > 18%, earnings CAGR > 20%
• Low score (under 40) = stagnant or declining revenue / earnings

Step 4 — Cross-check with sector context

Same score means different things in different sectors. A 70-score in IT services means the company is in the middle of a high-quality sector. A 70-score in PSU banking means it's the top of a lower-quality sector. Use the screener with sector filter + score range to find peers.

Step 5 — Run the calculators to validate

Triangulate the score with explicit valuation models:

• P/E Fair Value calculator — EPS × industry median P/E. Quick sanity check on Valuation factor.
• DCF Lite calculator — projected free-cash-flow-based intrinsic value. Best for stable cash-flow businesses.
• Dividend Yield calculator — payout sustainability check (Quality factor).

Scorecard + 3 calculator views all pointing same direction = high-conviction setup. Disagreement = pause and dig deeper.

Common misuses

• Buying purely on overall score. Score is a starting filter, not a buy signal. Read recent results, management commentary, sector outlook.
• Ignoring sector context. 60 in FMCG < 60 in mining.
• Skipping factor breakdown. Headline 75 hides a Leverage score of 35 — that NBFC is borrowing-funded; one liquidity event hurts.
• Using score alone for cyclicals. Steel / cement scores look bad at cycle troughs (when buying is best) and great at peaks (when selling is best). Use 5-year average score for cyclicals.

The conviction framework

Combine the scorecard with technical + signal layers for full conviction:

1. Fundamental scorecard ≥ 65. Pre-filter for quality.
2. Sector P/E within 10% of 5-yr median. Avoid stretched valuations.
3. Technical scorecard ≥ 60. Trend agrees with fundamentals.
4. SensexIQ active signal with confidence ≥ 50 and R:R ≥ 1.5. Entry timing edge.

When all four align, you have a high-conviction setup. Use position sizing (1-2% of capital) and explicit stop-loss management — even high-conviction trades fail 30-40% of the time.