---
title: "How the Tapetide Score Works"
canonical: "https://tapetide.com/score/methodology"
formula_version: "v2.0.0"
source: "live"
generated_at: "2026-10-28T19:32:54.086Z"
---

# How the Tapetide Score Works

Formula version **v2.0.0**. Canonical page: https://tapetide.com/score/methodology. Full specification, changelog and validation: https://github.com/Tapetide-hq/tapetide-score

The Tapetide Score is a deterministic 0–100 rating for liquid Indian (NSE/BSE) listed stocks. Six weighted pillars add up to a composite; a governance overlay can only pull it down. Every metric is normalized against a frozen, sector-relative reference, so the same inputs always produce the same score and two stocks scored against the same reference are directly comparable.

## How a score is built

The steps run in this order. Normalization happens before weighting, and the governance check after, so a red flag cannot be averaged away by good ratios.

1. Eligible universe: actively traded NSE/BSE stocks with sufficient price history.
2. Each raw metric is winsorized then normalized against a versioned, sector-relative reference distribution.
3. Pillar sub-scores combine metrics evenly; the composite is a weighted sum across pillars.
4. A governance overlay can reduce the score and hard-cap severe red flags.
5. Composite is smoothed and held in a small dead band to avoid day-to-day whipsaw.

## The six pillars

Each pillar is the plain average of its metrics. The composite is the weighted sum over whichever pillars a stock has, renormalized so the weights of the available pillars sum to 100. Weights sum to 100.

| Pillar | Weight | What it measures |
|---|---:|---|
| Quality | 22 | Capital efficiency, profitability, earnings quality, margin durability. |
| Valuation | 24 | How cheap or rich the stock is, both vs sector history and vs its own past. |
| Growth | 9 | Trailing sales growth. A single-metric signal, weighted low: longer-horizon growth measures did not predict forward returns in our testing. |
| Financial health | 9 | Solvency, leverage, interest coverage, balance-sheet resilience. Weighted as a risk control rather than a return driver. |
| Momentum | 12 | Medium-term price trend: six-month return plus distance from the 200-day moving average. |
| Ownership | 24 | Direction of institutional and promoter holding changes. |

### Governance overlay

Surveillance flags, credit downgrades, pledge, insider selling, audit qualifications. Pulls the score DOWN; can hard-cap it. It multiplies the composite and never adds to it; the multiplier is floored at 0.5, and the most severe flags hard-cap the score at 40.

## Reading the score

Scores concentrate in the middle of the 0-100 range: the observed all-time range is 12 to 76 and nothing has ever scored 80+. A 1-3 point gap between two stocks is inside the noise, so bands are the intended unit of comparison rather than exact rank.

| Score | Band | Share of scored stocks | Meaning |
|---|---|---:|---|
| 66 and above | Strong | 3% | broad-based strengths and clean governance |
| 55–65 | Good | 29% | above average, with real strengths across pillars |
| 45–54 | Average | 42% | roughly typical for its sector and size |
| 37–44 | Weak | 19% | meaningful caveats worth checking |
| below 37 | Poor | 8% | multiple weak pillars and/or active red flags |

## What the score is

- Data-driven, deterministic, reproducible — no LLM opinions.
- Same inputs always produce the same score (byte-stable, auditable).
- Standardized within a reference version: two stocks scored against the same frozen reference are directly comparable, and re-running the same inputs reproduces the same number exactly.
- Sector-relative: a bank and an FMCG company are scored fairly against their own sector's history, not against each other directly.
- Red flags can pull the score down, never average up into a positive number.

## What it is not

- Not investment advice. Decision-support only.
- A high score is not a forecast — it summarizes past + current evidence on traded liquidity, fundamentals, ownership and governance.
- Fundamental inputs are the latest reported figures, not the figures as they stood on a past date. A historical score therefore reflects later restatements, so the score history is best read as a trend rather than as a replayable point-in-time backtest.
- Scores are comparable within a reference version. The reference is frozen and versioned, but it is calibrated from one day's cross-section, so comparisons across different reference versions are approximate.
- The governance overlay is built from published regulatory and exchange disclosures. Those records begin partway through our history, so the penalties and caps are grounded in disclosed facts but have not yet been validated against a full market cycle.
- Eligibility requires enough traded days and enough populated metrics. Thinly traded stocks are deliberately left unscored rather than scored on sparse data.

## When it changes

- **cadence**: Once per trading day.
- **coverage**: Roughly 4,500 stocks are scored per run — every actively traded, sufficiently liquid NSE/BSE stock that clears the eligibility gate.
- **partial run protection**: A run that sees materially less than the recent norm is refused rather than published, and rankings fall back to the last complete day. A truncated run can never be served as a full picture.
- **scored date**: A score is stamped with the latest completed TRADING date, so weekends and market holidays reuse the previous session's score rather than inventing one.
- **stability**: Scores are smoothed and held within a small dead band, so a typical day moves the average stock by well under a point. Large single-day jumps indicate a real change in the inputs or a new red flag, not noise.
- **timing**: Recomputed each evening after that day's market data and fundamentals are consolidated, typically around 19:45 IST.

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Tapetide is not a SEBI-registered research analyst or investment adviser. Consult a qualified advisor before investing. Generated 2026-10-28T19:32:54.086Z.