Aum White Book Project Final - 074 Rathod Aum

“Risk return study of India's top five industries stocks throughout
COVID pandemic.”
A Project Submitted to
Somaiya Vidyavihar University for partial completion of the
Degree of Bachelor of Commerce in Financial Market
Under the Faculty of Commerce & Business Studies
By
Aum Bhaveshkumar Rathod
SEAT NO : 31010420074
Under the Guidance of

Dr. Shruti Chavarkar
S K SOMAIYA COLLEGE
SOMAIYA VIDYAVIHAR UNIVERSITY
VIDYANAGAR, VIDYAVIHAR (E).
MUMBAI - 400077
March 2023
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Certificate
This is to certify that Mr. Aum Bhaveshkumar Rathod has worked and duly completed
his Project Work for the degree of Bachelor of Commerce in Financial Markets under the
Faculty of Commerce and Business Studies in the subject of Financial Markets and his
project is entitled, “Risk return study of India's top five industries stocks throughout
COVID pandemic.” under my supervision.
I further certify that the entire work has been done by the learner under my guidance and
that no part of it has been submitted previously for any Degree or Diploma of any
University.
It is his own work and facts reported by his personal findings and investigations.
Signature Signature Signature

Of Course Of
Project Guide Coordinator Project Director
Name of External Examiner Signature of External Examiner
2
Department Stamp
Declaration by the learner
I, the undersigned Aum Bhaveshkumar Rathod hereby declare that the work embodied
in this project work titled “Risk return study of India's top five industries stocks
throughout COVID pandemic.” forms my own contribution to the research work
carried out under the guidance of Dr. Shruti Chavarkar and is a result of my own
research work. This work has not been previously submitted to any other university for
any degree/diploma to this or any other University.
Wherever reference has been made to previous works of others, it has been clearly
indicated as such and included in the bibliography. I, hereby further declare that all
information of this document has been obtained and presented in accordance with
academic rules and ethical conduct.
Name and Signature of the learner
Certified by
Dr. Shruti Chavarkar
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Acknowledgment
To enlist who all those who have helped me is difficult because there
numerous of them and the depth is enormous.
I would like to acknowledge the following as being idealistic channels and
fresh dimensions in the completion of this project.
I take this opportunity to thank the Somaiya Vidyavihar University for
giving me chance to do this project.
I would like to thank my Director, CA Monica Lodha providing the
necessary facilities required for completion of this project.
I take this opportunity to thank our Coordinator, Dr. Shruti Chavarkar
for her moral support and guidance.
I would also like to express my sincere gratitude towards my project guide,
Dr. Shruti Chavarkar whose guidance and care made the project
successful.
I would like to thank my College Library, for having provided various

reference books and magazines related to my project.
Lastly, I would like to thank each and every person who directly or
indirectly helped me in the completion of the project especially my Parents
and Peers who supported me throughout my project.
Aum Bhaveshkumar Rathod
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Index
Sr. Topic Page
no no.
1 Introduction 7
1.1 Risk 8
1.1.1 History of risk 8
1.1.2 Meaning of risk 10
1.1.3 Definition of risk by different authors 10
1.1.4 Types of risk 11
1.1.5 Measuring risk 13
1.2 Return 15
1.2.1 Type of return 16
1.2.2 Rate of return 17
1.2.3 Measuring return 18
1.3 Risk and return relationship 19
2 Literature review 26
3 Research methodology 31
3.1 Objective of study 31
3.2 Statistical tools 31
4 India’s top five industries 33
4.1 Health care industry 33
4.2 IT industry 34
4.3 Real-estate Industry 35
4.4 FMCG industry 36
4.5 Automobile industry 37
5 Data analysis and interpretation 38
5.1 Companies included in health sector with analysis and 38
interpretation
5.1.1 Sun Pharmaceuticals Industries Ltd (SUN 38
PHARMA)
5.1.2 Dr Reddys Laboratories Ltd (DR REDDYS 38
LAB)
5.1.3 Pfizer Ltd (PFIZER) 39
5.1.4 Glenmark Pharmaceuticals Ltd (GLENMARK 39
PHARMA)
5.1.5 Shalby Ltd (SHALBY) 39
5.1.6 Data analysis and interpretation of Healthcare 40
sector.
5.2 Companies included in IT sector with analysis and 43
interpretation
5.2.1 Infosys Ltd (INFOSYS) 43
5.2.2 LTI Mindtree Ltd (LTI MINDTREE) 44
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5.2.3 Cyient Ltd (CYIENT) 44
5.2.4 Birlasoft Ltd (BIRLA SOFT) 44
5.2.5 Mastek Ltd (MASTEK) 44
5.2.6 Data analysis and interpretation of IT sector. 45
5.3 Companies included in real estate sector with analysis 48
and interpretation.
5.3.1 DLF Ltd (DLF) 48
5.3.2 Godrej Properties Ltd (GODHREJ PROP) 49
5.3.3 Prestige Estates Projects Ltd (PRESTIGE 49
ESTATES)
5.3.4 Brigade Enterprises Ltd (BRIGADE 49
ENTERPRISE)
5.3.5 Puravankara Ltd 49
5.3.6 Data analysis and interpretation of Real-estate 50
sector.
5.4 Companies included in FMCG sector with analysis and 53
interpretation.
5.4.1 Nestle India Ltd 53
5.4.2 Colgate-Palmolive (India) Ltd (COLGATE 54
PULMOLIVE LTD)
5.4.3 Emami Ltd 54
5.4.4 Zydus Wellness Ltd (ZYDUS WELLNESS) 54
5.4.5 L T Foods Ltd 54
sector.
5.5 Companies included in Automobile sector with analysis 58
and interpretation.
5.5.1 Mahindra & Mahindra Ltd (M & M) 58
5.5.2 Eicher Motors Ltd (EICHER MOTORS) 59
5.5.3 Hero MotoCorp Ltd 59
5.5.4 Escorts Kubota Ltd (ESCORTS KUBOTA) 59
5.5.5 Force Motors Ltd (FORCE MOTORS) 59
sector.
6 Conclusion 64
7 Bibliography 66
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Chapter-1 Introduction
1. Introduction
The COVID-19 epidemic dramatically increased volatility in the Indian stock
market and had a big effect on it. According to studies, the energy industry was
the main source of net volatility transmission, and equities in this area had a
considerable spillover effect onto other industries. Because to its rapid spread
and high mortality rates, the COVID-19 epidemic also resulted in a collapse in
worldwide shares and generated a significant degree of anxiety and uncertainty.
During challenging circumstances, it is crucial to analyse the stock market,
which may be measured by the risk-return connection between individual stocks
and the market as a whole and this study measures same by considering 5 min
sectors of the economy. Each investor must weigh risk and return carefully
before making a decision. In financial management and portfolio analysis, risk
and return are crucial ideas since they enable investors to assess the possibility
of difficulties in investing while calculating the rewards from the same. Risk
considers the possibility that your investment may lose money, whereas return
is the amount of money you can earn over and above your initial investment. The
notions of risk and return are crucial to portfolio analysis and financial
management. According to the principle of risk and return, there is a direct
correlation between risk and return, with greater risks being accompanied by
greater potential rewards. A set of guidelines known as Modern Portfolio Theory
(MPT) aims to diversify investments to lower risk and boost profits. According
to Harry Markowitz's Modern Portfolio Theory, investors may borrow money at
risk-free rates if they make reasonable assumptions and solely look to their
global capital market portfolio for returns. Another idea, known as risk-return
analysis, aims to clarify investment by comprehending the connection between
risk and return. A financial model called the Capital Asset Pricing Model
(CAPM) determines the anticipated rate of return for an asset or investment.
Based on an asset's systematic risk, it is used to calculate a needed rate of return
that is theoretically suitable. The CAPM is an idealized representation of how
financial markets value securities and as a result establish expected returns on
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capital. It predicts the expected return on an investment given its systematic risk.
Hence, this study investigates Risk-return relationship of 5 most important sector
by taking into consideration 5 companies from each sector.
1.1 Risk
Every human activity involves some level of risk. We are exposed to hazards in
varying degrees from the time we wake up to the time we return to our beds (and
maybe even beyond). We may drive or use public transit to travel to school or to
work. The fact that we seek out some risks on our own (such as speeding on the
roads or gambling, for example) and enjoy them makes the study of risk
attractive, even though some of this risk carrying may not be entirely voluntary.
Some of these dangers can seem little, while others have a big impact on how
we live. On a more enlightened note, it can be argued that every significant
development in human civilization, from the development of tools by the
cavemen to the development of gene therapy, was made possible because
someone was prepared to take a chance and question the status quo.
1.1.1 History of risk

Risk and survival have often been intertwined throughout human history. Since
they were constantly in risk from predatory animals and bad weather while in
quest of food and shelter, prehistoric humans had brief and terrible existences.
Even when more evolved societies emerged in Sumeria, Babylon, and Greece,
other dangers (including war and sickness) persisted in wreaking havoc on
humanity. But, throughout a large portion of early history, danger to one's body
and monetary gain went hand in hand. The caveman who took a chance got food,
while the one who shied away from it starved to death. With the introduction of
shipping, risk-takers now had a new venue for doing so. Due to the risk-return
trade-off inherent in their advanced age, the Vikings sailed from Scandinavia in
magnificently built ships towards Britain, Ireland, and even over the Atlantic to
the Americas in pursuit of new countries to pillage. The growth of the maritime
trades led to new risk-return equations, where the rewards of ships that returned
with goods outweighed the risks of ships sinking and being hijacked by pirates.
When affluent traders wagered their money while the poor risked their lives on
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the ships, it also allowed for the separation of physical danger from economic
risk.
An excellent example is the spice trade, which was prosperous as early as
350 BC and developed to become the foundation for empires in the middle
of the past millennium.
Pepper and cinnamon would be loaded onto ships and sent by traders from
India to Persia, Arabia, and East Africa. The goods were then loaded onto
camels and transported to Venice and Genoa before continuing on to the
rest of Europe. The commerce to the East Indies was extended by the
Spanish and Dutch, then by the English via a wholly maritime route. With
the support of the crown, traders in London, Lisbon, and Amsterdam would
make investments in ships and supplies that would set off on the arduous
voyage. Although there were many risks along the route and it was common
to lose half or more of the cargo (and those carrying the cargo) along the
way, the high prices that the spices fetched in their final destinations still
made this a profitable venture for both the owners of the ships and the
sailors who survived.
The commerce in spices was not unusual. Before the industrial period,
economic activity frequently exposed people engaged to physical danger
with financial incentives. Spanish explorers therefore set out for the New
World knowing that there was a genuine chance of harm or death but also
that a successful expedition would bring them great rewards. Young men
from England left for the empire's far-flung territories in China and India in
the hopes of making their fortunes while putting themselves at danger of
sickness and combat-related mortality.
In the last couple of centuries, the emergence of financial markets and
instruments, on the one hand, and the expansion of the leisure industry, on
the other, have made it possible for us to distinguish between physical
danger and economic risk. In contrast to someone who spends the weekend
bungee jumping, who is exposed to great physical danger with no
opportunity for financial gain, someone who purchases options on
technology stocks can be exposed to enormous economic risk without any
chance for physical risk. Despite the fact that there are still many substantial
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physical dangers in the universe, this book focuses on economic risks and
their effects.
1.1.2 Meaning of risk

Risk is the unpredictability of anticipated future occurrences. Uncertainty
creates risk. Risk and uncertainty are not the same things. First off, not
every uncertainty carries a risk. Risk can be assessed, but uncertainty
cannot. Fear of an unanticipated event causes uncertainty. Risk is the
quantifiable component of uncertainty. Risk is the potential for monetary
loss. Entrepreneurs take risks in order to profit, and they are rewarded by
profit. To lessen the impact of risk, it can be insured against.
1.1.3 Definitions of risk by different authors
According to J.J Hampton, “Risk can be defined as the possibility that the
actual return from an investment is less than the expected return.”
J.C Van Horne defines, “Risk is the variability of potential returns of a

project.”
Weston & Brigham define, “Risk is the chance that some unfavorable
event will occur.”
According to Lawrence, 1976, “Risk is the measure of probability and the

weight of undesired consequences.”
According to Risk Management Vocabulary ISO 2002, “Risk is a

combination of the probability and scope of the consequences.”
Campbell, 2005 defines, “Risk equals expected damage.”
Aven & Renn, 2009 define, “Risk refers to uncertainty about and severity of the
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events and consequences (or outcomes) of activity with respect to something that
humans value.”
Rosa 1998 defines, “Risk as a situation or event where something of human

value (including humans themselves) has been put at stake and where the
outcome is uncertain.”
According to Risk Management, ISO, 2009, “Risk is the effect of uncertainty

on objectives.”
1.1.4 Types of risk

Generally risk in financial world is divided into two categories i.e Systematic
risk and Unsystematic risk
(Source: Author’s own compiled data)
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1.1.4.1 Systematic risk (Market risk)
Inherent hazards in the stock market include Systematic problems. They are
also known as "market risks" or "non-diversifiable risk" due to the fact that
they have an effect on the whole asset class. An organisation can't control,
reduce, or prevent systematic hazards if they are non-diversifiable. These
dangers are frequently brought on by a variety of external sources, such as
the present geopolitical environment, monetary policies, and natural
calamities. For instance, because it affects the whole stock market, COVID-
19 is a systemic risk.
-Types of systematic risk

Interest rate risk
Arises from a change in the interest rate on the market. Bond prices and
asset-backed securities are most affected, as well as fixed-income securities.
These securities' yields are negatively correlated with interest rates.
Investors are more enticed to withdraw money from fixed-income
instruments when interest rates rise.
Market risk
Stems from investors' overall propensity to act in accordance with market
conditions. During a financial crisis, for instance, investors stay away from
even the best-performing enterprises. Around two thirds of all systematic
risk is typically accounted for by market risk.
Purchasing power risk or Inflation risk

Purchasing power risk or Inflation risk is the effect of inflation's loss of
money's buying power. For instance, if inflation is 5% annually, you would
need $10.50 to purchase the same quantity of pens that would cost $10
today.
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1.1.4.2 Unsystematic risk (Nonmarket risk)
Unsystematic risks are risks that are peculiar to a firm or sector. They are
also referred to as nonsystematic risks, specific risks, diversifiable risks, or
residual risks. These risks are brought on by a variety of internal or external
variables that solely affect the specific business in question and not the
entire market.
Unrest among manufacturing workers, changes in regulations, and a lack of

raw materials are a few instances of unsystematic risk.
Unsystematic risks, as opposed to systematic risks, can be managed,

reduced, or even completely avoided by an organisation.
-Types of Unsystematic risk

Business risk
All internal elements that influence a company's earnings and performance
are considered business risks. Business risks can also be caused by external
reasons that are unique to a particular firm, such a product prohibition by
the government.
Financial risk
The debt and equity of a firm are related to financial risk. A company's debt-to-
equity ratio may suffer if it incurs too much debt. A negative debt-to-equity ratio
suggests that a business could be in financial trouble.
1.1.5 Measuring risk

Market risk and nonmarket risk are the two main categories of risk that affect
equities. Nonmarket risk, also known as specific risk, is the possibility that
circumstances unique to a firm or its sector will have a negative impact on the
stock price. For instance, a rise in oil prices is likely to have a negative impact
on the stock prices of the whole oil sector, but a significant management change
would only have an impact on one business. On the other hand, market risk is
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the chance that changes in the general stock market will have an impact on the
price of a certain stock.
By diversification, nonmarket risk may be minimised. You lower the danger that
nonmarket events may adversely influence your whole portfolio by owning a
variety of diverse stocks in various industries whose stock prices have displayed
minimal connection to one another.
You cannot completely remove market risk, no matter how many equities you
hold. You may, however, assess a stock's past sensitivity to market fluctuations
and choose those with a level of volatility you are comfortable with.
Two methods for assessing stock risk are beta and standard deviation.
-Beta
Beta is a statistical indicator of the effect previous changes in the stock market
have had on a stock's price. It may be found in many published services. A
pattern that shows the stock's exposure to stock market risk emerges by
comparing the returns of a particular stock to the returns of the Nifty 50.
The Nifty 50 is an unmanaged index generally considered representative of the
U.S. stock market and has a beta of 1. A stock with a beta of 1 means that, on
average, it moves parallel with the Nifty 50 - the stock should rise 10% when the
Nifty 50 rises 10% and decline 10% when the Nifty 50 declines 10%. A beta
greater than 1 indicates the stock should rise or fall to a greater extent than stock
market movements, while a beta less than 1 means the stock should rise or fall
to a lesser extent than the Nifty 50. Since beta measures movements on average,
you cannot expect an exact correlation with each market movement.
Your portfolio's overall market risk may be determined by calculating its beta.
Find the betas for each of your stocks to do this. A stock with a beta of 1.2 that
makes up 10% of your portfolio would have a weighted beta of 1.2 times 10%,
or.12, as opposed to a stock with a beta of 1.2 that makes up 80% of your
portfolio. To get the total beta of your portfolio, add up all of the weighted betas.
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-Standard deviation
Unaffected by the reason, a stock's volatility is measured by standard deviation,
which is also available in a variety of public services. It essentially explains how
much a stock's recent results have deviated from its historical average return.
The most typical method for calculating standard deviation is to determine the
variation from the average monthly return over a three-, five-, or ten-year period,
and then to annualize that value. Volatility is greater when the standard deviation
is higher. According to statistics, 95% of the time, the stock's return range will
be within two standard deviations of the average return, and 68% of the time, it
will be within one standard deviation.
Think about this instance. Let's say you hold a stock with a standard deviation
of 15% and an annualised return of 10.2%. 95% of the time, you can anticipate
a return that falls between -19.8% and 40.2%, while 68% of the time, you can
anticipate one that falls between -4.8% and 25.2%. (This example is given just
for illustrative purposes; it is not meant to forecast the success of a particular
investment.)
These two measurements can offer crucial details on the volatility of a company.
You might want to take action to lower risk if your portfolio is riskier than you
thought. You may wish to consider a stock's risk before investing.
1.2 Return
The money gained or lost on an investment over time is referred to as a return,
often known as a financial return.
The nominal change in the currency value of an investment over time can be used
to describe a return. The ratio of profit to investment can be used to calculate a
return as a percentage. Returns can either be shown as net results (after costs,
taxes, and inflation) or as gross returns, which just take the price change into
account.
An exact definition of return is situational and contingent on the financial data
input used to quantify it, as prudent investors are aware. Profit is an ambiguous
phrase that might refer to gross, operational, net, before tax, or after tax.
Investment is an umbrella phrase that can refer to particular, typical, or overall
assets.
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The return on an investment during the course of a specific investor's ownership
is known as the holding period return. Return throughout the holding term can be
stated as a number or as a percentage. The phrase is frequently used when
presented as a percentage (RoR).
For instance, the profit made over a period of a month is a monthly profit, while
one over a year is an annual profit. People frequently have an interest in the yearly
return on an investment, also known as the year-on-year (YoY) return, which
determines how much the price has changed from now to the same day the
previous year.
Returns across periodic intervals of various lengths may only be compared once
they have been changed to intervals of the same duration. It is typical to compare
results obtained over periods of a full year. Annualization is the process of
changing return periods that are shorter or longer to yearly returns.
1.2.1 Types of return
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-Interest
Interest is paid on investments like bonds, GICs, and savings accounts. With these
kinds of investments, you can make decisions knowing exactly how much money
you'll make.
-Dividends
A portion of the profits made by the firm are distributed to investors as dividends
in some stocks. Through these investments, you receive a consistent income. The
size of the dividend is determined by the company's performance that year and
the kind of shares you possess.
-Capital gains
You will experience a capital gain as an investor if you sell an investment, such
as a stock, bond, mutual fund, or ETF, for more money than you originally paid
for it. You will suffer a capital loss if you sell it for less than you paid for it.
1.2.2 Rate of return

The rate of return, which is calculated as a percentage of an investment's initial
cost, is a metric measuring how well it has performed over time. A rise in value
is represented by a positive return, whereas a loss is represented by a negative
return. Regardless of whether an investment is still being kept or was sold, a rate
of return determines the percentage change in value.
Every asset, including stocks, bonds, mutual funds, real estate, collectibles, and
more, may be valued using the rate of return.
Two inputs are necessary to determine a rate of return:

1. The investment amount purchased
2. The investment's current or final worth throughout the measurement period
The assessment also takes into account any appropriate interest and dividend
payments made while owning the asset.
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Any time period, including sub-periods, can be used to calculate the rate of
return. As an illustration, it may be computed for a year and then broken down
into each month and each quarter of that year. These rates of return can be
compounded to get an annualised return when measuring the rate of return over
shorter time frames, such months.
Rate of return is a metric that investors use to assess the success of their assets.
It is possible to evaluate the achieved rate of return in relation to one's own return
expectations or to the performance of other assets, indexes, or portfolios.
The success of different company sectors or assets may be measured by rates of
return, which can help businesses decide how to best invest their cash in the
future.
1.2.3 Measuring return
A simple rate of return is calculated by subtracting the initial value of the
investment from its current value, and then dividing it by the initial value. To
report it as a %, the result is multiplied by 100.
Rate of Return % = [(Current Value – Initial Value) / Initial Value] x 100
For the arithmetic average return, one takes the sum of the returns and divides it
by the number of return figures.
Average Return = Sum of Returns / Number of Returns
The average return tells an investor or analyst what the returns for a stock or
security have been in the past, or what the returns of a portfolio of companies
are. The average return is not the same as an annualized return, as it ignores
compounding.
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1.3 Risk and return relationship
One of the most crucial ideas for investors to comprehend is the connection
between risk and return, which is a fundamental idea in finance theory. In both
theory and practise, the uncertainty that an investment will generate its projected
rate of return is a commonly used definition of investment risk. "Return" and
"rate of return" are terms that are frequently used in financial literature.
A sane investor won't try to take on more risk if they don't think they'll get more
in return. To define and quantify the link between risk and return, a tremendous
amount of theoretical and empirical study has been conducted since the early
1950s.
-Modern Portfolio Theory

An investing theory known as the Modern Portfolio Theory (MPT) enables
investors to put up an asset portfolio that optimises expected return for a specific
amount of risk. According to the hypothesis, investors always favour the less
risky portfolio for a given amount of projected return because they are risk
averse.
So, a higher amount of risk must be offset by a larger projected return for an
investor, according to Modern Portfolio Theory. The fundamental principle of
diversification, according to MPT, is that it is less hazardous to own a portfolio
of assets from various classes than it is to maintain a portfolio of similar assets.
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The first significant theoretical attempt to quantify the link between risk and
return was made by Harry M. Markowitz in the early 1950s when he first created
portfolio theory (Portfolio Theory often is referred to as Modern Portfolio
Theory or MPT). According to portfolio theory, risk is defined as the
unpredictability of returns, and the link between risk and return is quantified
using conventional statistical methods. To assess the uncertainty of returns, these
strategies apply statistical measurements like variance and standard deviation.
Note that "uncertainty of returns" include both the potential for gains relative to
expectations as well as the potential for losses. Some theoretical work has been
done using metrics that solely take into account negative departures from
expectations since investors are often more concerned about negative shocks
than positive surprises. Yet, the most common risk model employed in both the
theory and practise of investing remains to be risk as the uncertainty of returns,
encompassing both positive and negative departures from expectations.
-Capital Asset Pricing Model

The link between systemic risk, or the overall dangers of investing, and expected
return for assets, particularly equities, is described by the Capital Asset Pricing
Model (CAPM). A linear link between the expected return on an investment and
risk is established by this financial model. The link between an asset's beta, the
risk-free rate (usually the interest rate on Treasury bills), and the equity risk
premium, or the projected return on the market less the risk-free rate, serves as
the foundation for the model.
In order to quantify this systemic risk, CAPM was developed. It is frequently

used in the financial industry to value hazardous securities and calculate
projected returns for assets given their risk and cost of capital.
In order to create asset valuation models like the Capital Asset Pricing Model,
or CAPM, William F. Sharpe and others expanded the concept of portfolio
theory. A risk-free asset and a portfolio of risky assets can be combined to create
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a complete portfolio that effectively balances risk and return. This idea was first
suggested by CAPM. Also, it made it possible to compare the link between the
returns of particular assets and the return of a portfolio that represents the entire
market in order to more easily estimate the risk of specific assets. The extension
of the theoretical underpinnings that distinguish between the unsystematic risk
unique to individual firms, which can be eliminated through adequate
diversification, and the systematic risk inherent in investing in risky assets,
which cannot be eliminated, was another significant contribution made by
CAPM.
An investor is intended to be able to control their risk by using the CAPM to

construct a portfolio. The following graph illustrates where a portfolio would be
located on the efficient frontier curve if an investor were able to utilise the
CAPM to perfectly maximise a portfolio's return in relation to risk.
(Source: Investopedia)
The graph illustrates how higher expected profits (y-axis) call for higher
anticipated risk (x-axis). According to modern portfolio theory (MPT), a
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portfolio's anticipated return rises as risk does, starting with the risk-free rate. A
notional portfolio can be built on the capital market line (CML) with the highest
return for the amount of risk being taken at some point, but any portfolio that fits
on the CML is better than any hypothetical portfolio to the right of that line.
While being challenging to define, the CML and the efficient frontier serve as
excellent examples of a key idea for investors: there is a trade-off between
improved yield and increased risk. Investors frequently take on excessive risk in
order to increase their returns because it is impossible to properly construct a
portfolio that fits on the CML.
You can see two portfolios that were built to fit along the efficient frontier in the
accompanying graph. Portfolio A has a 10% standard deviation and is predicted
to have an annual return of 8%. Despite having a 16% standard deviation,
Portfolio B is predicted to yield 10% annually. Portfolio B's predicted returns
increased more slowly than its risk did.
The efficient frontier can only be determined theoretically and makes the same
assumptions as the CAPM. A portfolio would offer the highest return possible
given its degree of risk if it were located on the efficient frontier. Yet, since
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future returns cannot be forecast, it is hard to tell whether a portfolio is on the
efficient frontier.
The efficient frontier graph may be reconfigured to show the risk against return
tradeoff for specific assets. This risk versus return tradeoff relates to the CAPM.
You can notice that the CML is now referred to as the security market line in the
accompanying graphic (SML). The stock's beta is utilised as the y-axis instead
of predicted risk. The graphic shows that when beta rises from 1 to 2, the
predicted return similarly rises.
The CAPM and SML establish a link between a stock's beta and its anticipated
risk. When daily share price returns are compared to daily market returns over
the exact same time period, beta is calculated using statistical analysis. A
portfolio of high-beta companies may be found someplace on the Spectrum
where the trade-off is tolerable, though not theoretically optimal. A greater beta
suggests more risk, but it's possible that such a portfolio doesn't exist.
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Due to assumptions regarding beta and market participants that are unfounded
in actual markets, the usefulness of these two models is reduced. For instance,
beta does not take into account the relative riskiness of a stock compared to
another stock with an equal high beta that does not experience the same kinds of
price movements to the downside. A stock that is more volatile than the market
and experiences downside shocks more frequently is considered to be more risky
than another stock.
-Fama-French three-factor model

In an effort to more accurately gauge market returns, Nobel laureate Eugene
Fama and researcher Kenneth French, both former professors at the University
Of Chicago Booth School Of Management, discovered that value companies
beat growth stocks via study. Similar to how small-cap companies often do better
than large-cap equities. When used as a tool for evaluation, portfolios with a high
proportion of small-cap or value companies would perform worse than the
CAPM result because the Three-Factor Model makes a downward adjustment
for observed outperformance of small-cap and value stocks.
The book-to-market values, company size, and excess return on the market are
the three components of the Fama and French model. The three variables are, in
other words, the portfolio return less the risk-free rate of return, high minus low
(HML), and small minus large (SMB). SMB accounts for publicly listed
businesses with small market capitalization that provide better returns, whereas
HML accounts for value stocks with high book-to-market ratios that produce
returns that are higher than the market average.
Whether the outperformance trend is caused by market efficiency or market

inefficiency is a hotly contested topic. The outperformance is typically explained
by the additional risk that value and small-cap companies experience as a result
of their higher cost of capital and higher business risk, which supports market
efficiency. Market participants misprice the worth of these enterprises, which
results in the excess return over time as the value adjusts, explaining the
outperformance in favour of market inefficiency. Investors are more inclined to
24
support the efficiency side if they accept the body of evidence offered by the
Efficient Markets Hypothesis (EMH).
Fama and French emphasised that investors need to be prepared to withstand the
added volatility and sporadic underperformance that may happen in a short
period of time. Losses incurred in the short term will be compensated for by
investors with a long-term time horizon of at least 15 years. When size and value
variables are paired with the beta component, Fama and French's model may
then explain as much as 95% of the return in a diversified stock portfolio,
according to research they did using thousands of random stock portfolios.
Investors can build a portfolio in which they obtain an average expected return
in accordance with the relative risks they accept in their portfolios by having the
capacity to explain 95% of a portfolio's return versus the market as a whole.
According to the book-to-market ratio, the three key variables that affect
predicted returns are sensitivity to the market, sensitivity to size, and sensitivity
to value stocks. Unpriced or unsystematic risk may be blamed for any increased
average anticipated return.
All the above discussed theories somewhere mention that as the risk increases
return increases and vice versa.
25
Chapter-2 Literature Review
2. Literature review
Arafat Rahman et al. 2021 the stock markets have fallen to their lowest points in
many decades, particularly in South Asia, as a result of the quickly escalating
and terrifying effects of COVID-19 dissemination. This worry prompts them to
look at how the stock markets in Bangladesh, India, Pakistan, and Sri Lanka have
responded to the COVID-19 outbreak. Using panel data from the aforementioned
nations, their study seeks to determine the causal relationship between the
number of confirmed COVID-19 cases and stock market returns. The paired
Granger causality test is used in their study to cross-validate the findings. The
empirical findings point to a one-way causal relationship between COVID-19
and stock market returns, demonstrating that the spread of COVID-19 has a
predominately short-term impact on stock movements.
Sonia Lobo and Ganesh Bhat 2021 several investors shifted their investments to
the financial services segment as a result of the financial services sector's
explosive expansion. The individual investor should do a risk-return analysis
well in advance to build an appealing portfolio. The investor can use this to
assess the risk-return relationship of various assets. With this context, a research
is conducted to assess the risk-return trends of securities in the Indian financial
services sector. They evaluate risk-return By using the monthly closing price of
five financial investment firms included in the Standard & Poor's BSE Finance
Index, the risk and return of a sample set of companies from the Indian Financial
Services industry are studied to come up with a monthly return.Several statistical
methods, including descriptive statistics, correlation, and beta, are used to attain
the goals. Also, a paired t-test is run to see whether the hypothesis is correct.
Rahul Moolbharathi and Tukaram Sugandi (2021) Considering how

unpredictable the stock market is right now, it is important to make informed
market investments. To better understand how the stocks move in relation to the
market, this study measured the risk and return of individual equities using their
respective benchmark indexes. The article aids the investor in comprehending a
26
brief overview of the many statistical methods that may be used to evaluate the
risk and return of equities. Their study compared the performance of indexes to
benchmark indices. For five major sectors—automobile, banking, finance,
FMCG, and information technology—that directly reflect the nation's economic
health, the daily return of the stock is computed and the standard deviation is
recorded.Several other statistical approaches are used to show how the risk and
return vary by sector and to identify the sector that offers the best risk-return
combination for investment.
Ruchi Prabhu 2019 The dangers associated with investing in stocks can be
directed but not managed. Most of these risks have an impact on the market or
the economy, necessitating either portfolio adjustments or weathering the storm
by investors. Their study used the Nifty Index as a benchmark to examine the
risk and return in the banking industry. The major goal of their study was
performance evaluation of stocks is to determine the needed rate of return and
risk of a certain stock based on various market risk elements and other economic
considerations.
Ashok Bantwa and Faizan Ulhaqq 2019 Ansari They investigate risk return
profile of the equity equities of a few Indian IT businesses that are listed on the
NSE's IT Index. A number of criteria, including the absolute return, abnormal
return, needed rate of return under the CAPM model, volatility of return,
systematic risk, and risk adjusted return, have been used to analyze the risk return
profiles of chosen IT businesses. Researchers discovered that Tata Elxsi,
Infibeam Avenues, and NIIT technologies had the highest rate of return to offer.
Infibeam Avenues, Tata Elxsi, and Mindtree all have extremely unstable returns.
Paramanand prasad yadav 2010 Their study's main goal is to evaluate the risk
involved in the return on common stock investments made by the listed
commercial banks using a limited set of financial and statistical methods.
Commercial banks' risk and return have been calculated by them using financial
methods including MPS, DPS, EPS, Return on Common Stock, Expected Return
on Common Stock, Standard Deviation, Coefficient of Variation, Portfolio Risk,
27
Portfolio Return, and Required Rate of Return. They concluded that Except for
NABIL, whose stock is overpriced, all of the banks in this study's analysis are
reported to have underpriced stocks. The common stocks of these firms are
valuable to buy because their predicted return exceeds the needed rate of return.
The predicted return on NABIL stock is less than the needed rate of return, hence
it is worthwhile to sell.
Syed Asim Shah, Hassan Raza and Aijaz Mustafa Hashmi 2022 Their paper
analyses how the Covid 19 pandemics have affected the downside risk-return
volatility on the four major stock markets in the United States, the United
Kingdom, China, and Pakistan. At both the local and macroeconomic levels as
well as throughout the stock markets of many nations, the pandemic has
devastating effects on the economy and finances. The pandemic period has a
substantial impact on investor risk and return in the selected stock markets of the
USA, UK, Pakistan, and China. The study's findings show greater evidence of
the downward anomalous returns in both markets.
Smita Jape and Mahiba Pauldhas 2021 Equity market investing is always seen
as hazardous. One of the things that affects stock prices is market sentiment. The
goal of the their study is to comprehend how economic variables in times of
crisis affect bank stock values during the COVID crisis. Economic indicators
such as Nifty, Sensex, Exchange Rate, FII movement, and G-sec coupon rate
were taken into account when analysing banking stocks. Using SPSS, regression
and correlation tests are used to determine whether a variable is significant. They
concluded that when regressed with the Nifty factor during the pre- and post-
period, the value for each bank stock is less than 0.05 at a 5% level of
significance, indicating a strong influence of the Nifty on the chosen Bank
stocks. The stock prices of SBI are significantly impacted by currency rates as
well (p 0.05). Private banks, however, do not demonstrate any effect of exchange
rate on equities in the prior period. The stock prices of Kotak Mahindra Bank are
not significantly impacted by changes in the exchange rate in the post-period
(p>05).
28
Elsas et al., 2003 claims that high risks are linked to high potential rewards and
low risks are linked to low potential returns. Achieving a balance between the
demand for the lowest risk and the biggest return is the goal of the risk return
trade-off. It's a frequent misperception that increased risk translates into higher
returns. According to the risk-return trade-off, increased risk offers the potential
for higher gains. There are no certainties, and risk carries with it the possibility
of greater potential losses as well as greater possible gains.
Nikhitha MH and Satyendra Singh 2020 Of the different investing options,

equity shares are one of the most well-liked and intriguing. Despite the
considerable risk involved, intelligent investors choose their stocks for
investments based on a variety of considerations, but the two that matter the most
are risk and return. The use of these two characteristics while analysing and
choosing equities for investing purposes is also stressed by contemporary
portfolio theory. They evaluate and contrast 10 well-known equities from each
of the automobile and pharmaceutical industries, two significant sectors of the
Indian economy, based on their risk and return. They conducted a very thorough
study of these equities considering their overall risk as well as beta components,
systematic risk, and unsystematic risk. These equities have also been examined
using Sharpe's ratio in terms of the risk-adjusted returns they have produced. The
analysis shows that of the two selected sectors' equities, the pharmaceutical
sector's stocks produced the highest return at a relatively low risk.
P.Karthika and P. Karthikeyan 2011 Most individual investors base their

decisions in large part on risk and reward. Every investor seeks to minimise risk
and increase profit. Risk and reward typically go hand in hand. If a shareholder
wants to improve returns, they must understand that doing so will require taking
on a correspondingly larger level of risk. The research compares the risk, return,
and liquidity of stocks of certain firms from various industries, such as
information technology, automobiles, banking, pharmaceuticals, and oil. Beta,
standard deviations, coefficient of correlation tools, and a method for evaluating
risk are used to discuss the trade-off. According to their calculated beta values,
the banking, power, construction, and oil and gas industries are the most
29
aggressive and risky, while the pharmaceutical, housing-related, and automotive
sectors are the most defensive and least risky.
Mahir Ambelal and Avani Sebastian 2021 They investigate how the 2009 H1N1
and COVID-19 pandemics affected 80 pharmaceutical equities included on 11
market indexes in terms of returns, volatility, systematic risk, and total risk
composition. The research generates an expectation of the probable impact that
the Covid-19 epidemic will have on the performance of pharmaceutical equities
using Bayesian inference and Monte Carlo simulation. According to the
estimate, stock prices might rise by up to 25% of what they were at the beginning
of the epidemic. The findings also indicate that the pandemic's negative effects
will manifest as more volatility rather than lower returns.
Yihan Dong 2021 Global financial markets have been significantly impacted by
the ongoing COVID-19 outbreak. Based on a sample of the five largest banks in
China and the United States for quarterly periods between 2018 and 2020,
His study investigates the effect of the COVID-19 epidemic on the financial
performance of U.S. and Chinese institutions.He use a time series analysis, a
moderation analysis, and an OLS regression model to investigate this issue and
discover that the COVID-19 epidemic has a large negative influence on the
profitability of Chinese and American institutions. The findings imply that the
COVID-19 epidemic has had a considerable negative impact on U.S. institutions'
profitability while having little to no effect on Chinese banks' profitability.
Asli Demirguc-Kunt, Alvaro Pedraza and Claudia Ruiz-Ortega 2020 Their study
examines bank stock prices throughout the globe to see how the COVID-19
epidemic has affected the banking industry. The research also investigates the
impact of financial sector policy announcements on the performance of bank
stocks using a worldwide database of policy responses throughout the crisis.
Overall, the findings point to the banking systems being under severe stress as a
result of the crisis and the countercyclical lending role that banks are supposed
to play, with bank stocks lagging their home markets and other non-bank
financial companies.
30
Chapter-3 Research methodology
3. Research methodology
This is a Quantitative study based on secondary data which is collected form
NSE (National Stock Exchange) official website, yahoo finance and screener
websites. The closing price of 5 companies from 5 each sector i.e. (health care
sector, IT sector, real-estate sector, FMCG sector and Automobile sector) is
drawn out. Companies from each sector is chosen randomly. The companies
consist the mixture of Large CAP, Mid CAP and Small CAP to get a proper
results. The data is collected for the COVID phase (30 January 2020- 31st
December 2021).
3.1 Objective of study

The main goal of this study is to evaluate the risk associated with the return of
certain corporations from the five most significant industries using specialised
financial as well as statistical techniques.
-To determine which industry during COVID has a superior risk-return
relationship.
-To assess the chosen firms' systematic risk (Beta) and overall risk (standard
deviation).
Making pertinent recommendations and useful suggestions based on results.
3.2 Statistical tools

- Return:
On this basis, those closing prices were taken from the NSE (2023) website of a
total of 25 companies of 5 sector in India the daily return was calculated as
follows:
Return = (Adjusted closing price of the day ‘t’ - Adjusted closing price of day
‘t-1’) / (Adjusted closing price of day ‘t-1’)
31
-Average return:
An average return is an average of a series of returns that occurred over some
time.
Average return = total of series of returns / total number of returns.
-Standard Deviation:
Standard deviation is a popular measure of variability because it shows a
"typical" deviation from the mean.
S.D. = Square root of the variance
-Beta:
It measures the systematic risk of all companies by taking the market index as a
benchmark.
Beta = covariance (Ri, Rm) / variance (Rm)
32
Chapter-4 India’s top five industries
4. India’s top five industries

4.1 Health care industry
One of India's fastest-growing industries is the healthcare sector, which is being
fueled by the nation's enormous population, which has a high illness burden, and
its expanding middle class, which has growing healthcare demands. The Indian
healthcare sector includes a number of different segments, including
telemedicine, hospitals, medicines, medical equipment and supplies, diagnostics,
and health insurance. India has a vast network of public and private healthcare
facilities. Public healthcare is primarily managed by the government and
provides healthcare services at low or no cost to the public.
Healthcare is one of the most important industries in any economy, and its
significance cannot be disputed. The following are some of the main factors that
make the healthcare industry crucial to any economy: Population health and
wellbeing, employment, economic expansion, innovation, and social welfare.
Overall, the healthcare industry is essential to population health, economic
development, and social welfare, making it one of the most important economic
sectors.
India's healthcare sector and stock market are closely intertwined since stock
prices of healthcare businesses listed on the stock market are frequently
influenced by the health sector's success. One of the industries in India that is
expanding the quickest and has the most potential for growth is the healthcare
industry, which has attracted investors with its appealing investment
opportunities. Overall, the healthcare industry in India has been performing well
in recent years, and the stock prices of many healthcare companies have been on
an upward trend.
The Indian healthcare market is expected to triple in size and reach $8.6 trillion
by 2022. 12% of the nation's GDP was spent on healthcare-related governmental
expenditures. The need for insurance is greatly increasing due to the expanding
middle class and the emergence of new diseases. The need for insurance is
33
expected to grow over the next several years due to the desire for accessible,
high-quality healthcare. As of 2020, the Indian medical tourism sector will be
well worth $2.89 billion USD. By 2026, it is anticipated to generate US$ 13.42
billion in revenue. The following are a few of the significant steps the Indian
government has done to promote Indian healthcare internationally. Speaking at
the global COVID-19 meeting in September 2021, Prime Minister Mr. Narendra
Modi claimed that India has shared its vaccine output with 95 nations, including
the UN's housekeepers.
4.2 IT industry
During the 1990s, India's IT industry has expanded quickly, mostly due to the
availability of a qualified workforce and cheaper labor costs. Software
development, hardware production, IT-enabled services, and e-commerce are
just a few of the diverse endeavors that make up India's IT sector. With several
Indian businesses offering IT solutions and services to clients throughout the
world, India's IT sector has become a major global center for software
development and IT services.
The software development segment of India's IT sector is the largest, accounting
for around 70% of the total IT industry revenue. Indian IT companies are known
for their expertise in software development, with a particular focus on enterprise
software, mobile applications, and cloud computing. India's IT sector is also a
major player in the outsourcing market, providing IT services to companies
worldwide.
India's IT (Information Technology) industry is crucial, and over time, it has
significantly increased the country's economic output. The following are some
of the main explanations behind the importance of India's IT sector: Economic
growth, Innovation, Foreign exchange earnings, Digital revolution, empowering
small enterprises.
Overall, India's IT industry is a key component of the national economy and has
the potential to develop significantly over the next several years. A competent
labour pool, a positive business climate, and government measures that assist the
expansion of the IT industry are the sector's driving forces.
Indian IT industry growth is roughly twice as fast as overall economic growth.
34
According to industry group Nasscom, based on the performance of the first nine
months of the year 2022 and projections for that year's current quarter, the
sector's revenue is expected to increase by 15.5% to $227 billion in 2021–22.
India's GDP is anticipated to increase by 8% to 9%. "Because to the industry's
continued emphasis on client centricity, this year has been a turning point for the
IT sector. After 30 years, the business has added $100 billion in the last ten years
"Debjani Ghosh, the president of Nasscom, remarked. Since the pandemic
slowed down economies, the global economy has on a growth trajectory.
Spending on software and services worldwide reached $1.7 trillion in 2021,
increasing by 8.7%. With the rising need for more modern technologies like
cloud and analytics, Nasscom anticipates that industry revenue would reach $350
billion by the 2026 fiscal. Cost, talent, innovation, inclusivity, and sustainability
are the differentiators that each nation and any sector should have. The story of
India is growing in strength, according to Ghosh.
4.3 Real-estate Industry

A major business in India, real estate includes a variety of operations relating to
the acquisition, resale, and leasing of real estate. The industry, which
encompasses both residential and commercial real estate, is essential to the
nation's economy.
For various reasons, including job generation, investment and growth, economic
activity, tax income, and social benefits, the real estate sector is a crucial part of
every economy. The sector is essential to the economy's expansion and
development, and the health and growth of the sector are directly related to the
state of the economy as a whole.
By 2025, Savills India projects that the need for data centre real estate would rise
by 15 to 18 million square feet. Residential property demand has grown as a
result of growing urbanisation and rising household income. India is one of the
top 10 home markets in the world for price appreciation. By 2023, organised
retail real estate stock is anticipated to grow by 28% to 82 million square feet.
ICRA forecasts that Indian businesses would raise more over Rs. 3.5 trillion
(US$ 48 billion) through infrastructure and real estate investment trusts in 2022
as opposed to the US$ 29 billion raised so far. Blackstone, a private market
35
investor, has made large investments in the Indian real estate market, totaling
Rs. 3.8 lakh crore (US$ 50 billion), and it plans to make more investments
totaling Rs. 1.7 lakh crore (US$ 22 billion) by 2030. There is a rise in private
investment in the sector, driven by rising transparency and rewards. Institutional
investments in Indian real estate totaled $5 billion in 2020, which is 93% more
transactions than were reported the year before. In Q4 FY21, the real estate
sector attracted 19 agreements totaling Rs. 23,946 crore ($3,241 million) in
private equity investments. India recorded investments of US$2.4 billion in real
estate assets in the first half of 2021, an increase of 52% YoY. From April 2000
and September 2022, Investment in the sector—which includes construction
development and activities—amounted to US$55.18 billion.
4.4 FMCG industry

The fourth-largest sector of the Indian economy is the fast-moving consumer
goods (FMCG) industry. Consumer packaged products having a rapid turnover
rate—i.e., those that are created, delivered, advertised, and consumed quickly—
are what define it. Detergents, personal care items, dental care goods, cosmetics,
and other FMCG products now rule the market. Pharmaceuticals, consumer
electronics, soft drinks, packaged food items, and chocolates are also part of
India's FMCG industry. Due to the wide variety of products in the industry,
different businesses control the market in different sub-sectors.
The FMCG sector in India makes a significant contribution to the country's GDP.
The primary growth factors for the industry have been more awareness, better
access, and shifting lifestyles. The greatest contributor to the entire income
produced by the FMCG industry in India (which accounts for a revenue share of
around 55%) is the urban segment. Yet, compared to urban India, the FMCG
market has risen more quickly in rural India during the past few years. The semi-
urban and rural populations are expanding quickly, and 50% of all rural
expenditure is on FMCG items.
36
4.5 Automobile industry
Due to the vehicle sector's importance to both macroeconomic development and
technical innovation, the Indian automobile industry has historically been a
reliable barometer of how well the economy is doing. Due to a large portion of
India's population being youthful and a developing middle class, the two-
wheeler category dominates the market in terms of volume. Also, the sector's
expansion was facilitated by businesses' rising interest in investigating rural
markets. The demand for commercial cars is increasing as the logistics and
passenger transportation sectors expand. The electrification of vehicles,
especially three-wheelers and compact passenger cars, is one of the emerging
trends that is expected to drive market growth in the future.
As the largest tractor, second-largest bus, and third-largest heavy truck
manufacturer in the world, India holds a dominant position in the worldwide
market for heavy vehicles. 22.93 million Autos were produced annually in India
in FY22.
India is a significant exporter of automobiles and anticipates rapid export
development in the near term. Additionally, a number of government-sponsored
programs, including the Automotive Mission Plan 2026, the scrappage policy,
and the production-linked incentive program in the Indian market, are
anticipated to elevate India to a position of prominence in the global two- and
four-wheeler markets by 2022
37
Chapter-5 Data analysis and interpretation
5. Data analysis and interpretation

When risk increases, the potential gain also increases, according to the risk-
return tradeoff. The simple interpretation of this is that return should rise when
risk rises, and vice versa. The results in this study will be compared with the
axiom that "higher the risk, higher the return" and "lower the risk, lower the
return" in attempt to deliver a more detailed explanation.
5.1Companies included in health sector with analysis and

interpretation
5.1.1 Sun Pharmaceuticals Industries Ltd (SUN PHARMA)
-Market capitalization :- 2,41,361 (large CAP)
-About :- Sun Pharmaceutical Industries Ltd manufactures, develops, and
markets a variety of branded and generic formulations as well as Active Pharma
Ingredients (APIs). The corporation and its subsidiaries have a variety of
production sites dispersed across the globe, with trade and other incidental and
connected operations reaching the worldwide market. It is India's largest
pharmaceutical corporation.
5.1.2 Dr Reddys Laboratories Ltd (DR REDDYS LAB)

-Market capitalization :- 75,624 (large CAP)
-About :- Leading Indian pharmaceutical firm Dr. Reddy's Laboratories Ltd.
provides a range of goods and services, such as Active Pharmaceutical
Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics,
biosimilars, and differentiated formulations.
38
5.1.3 Pfizer Ltd (PFIZER)
-Market capitalization :- 17,529 (mid CAP)
-About :- Pfizer Ltd. produces pharmaceutical goods and exports them as well
as markets and trades them. It uses its own facilities to make items, as well as
several independent contract and third-party manufacturers located all
throughout the nation. It sells its goods through independent distributors,
particularly in India. The firm is India's third-largest global pharmaceutical
corporation.
5.1.4 Glenmark Pharmaceuticals Ltd (GLENMARK PHARMA)
-About :- Glenmark Pharmaceuticals Ltd. is a multinational, research-driven
pharmaceutical firm with operations in over 80 countries with a presence in the
generic, specialty, and over-the-counter markets.
5.1.5 Shalby Ltd (SHALBY)

-Market capitalization :- 1,465 (small CAP)
-About :- Shalby Limited works in the Indian healthcare delivery industry. It has
a network of multi-specialty hospitals throughout India. The company's primary
business is providing patients with tertiary and quaternary healthcare services in
a variety of specialisations, including orthopaedics, complicated joint
replacements, cardiology, neurology, cancer, rental transplantations, etc.
39
5.1.6 Data analysis and interpretation of Healthcare sector.
Table 1. Market capital of the selected health care companies

Health care co. MARKT.
CAP
SUN PHARMA 2,41,361
DR REDDYS LAB 75,624
PFIZER 17,529
GLENMARK PHARMA 12,118
SHALBY 1465
(Source: screener (2023))
Graphical representation of Table 1.
market cap.
300,000
250,000 241,361
200,000
150,000
100,000
75,624
50,000
17,529 12,118
1,465
0
SUN PHARMA DR REDDYS LAB PFIZER GLENMARK SHALBY
PHARMA
40
Table 2. Average returns of healthcare sector companies with total risk
(standard deviation)
Health sector Standard Average
companies deviation return
Market 25.22% 0.09%
PFIZER 28.89% 0.07%
DRREDDY 31.20% 0.12%
SUNPHARMA 33.43% 0.16%
GLENMARK 48.69% 0.15%
SHALBY 56.90% 0.12%
Average returns of healthcare sector

companies with total risk(standard
deviation)
56.90%
48.69%
33.43%
60.00%
31.20%
50.00%
28.89% 0.12%
40.00% 0.15% SHALBY
25.22% GLENMARK
30.00% 0.16%
0.12% SUNPHARMA
20.00% DRREDDY
0.07%
10.00% 0.09% PFIZER
Market
0.00%
standard average
deviation return
Market PFIZER DRREDDY SUNPHARMA GLENMARK SHALBY
41
Table 3. Average returns of healthcare sector companies with systematic
risk (beta)
Health sector Beta Average
companies return
Market 1.000 0.09%
PFIZER 0.342 0.07%
DRREDDY 0.449 0.12%
SUNPHARMA 0.664 0.16%

GLENMARK 0.801 0.15%
SHALBY 1.015 0.12%
Average returns of healthcare sector

companies with systematic risk (beta)
1.015
0.801
0.664
1.200 1.000
1.000 0.449 0.12%
0.15% SHALBY
0.800
0.342 0.16% GLENMARK
0.600 SUNPHARM
0.12% A
0.400 0.07% DRREDDY
0.200 0.09% PFIZER
Market
0.000
beta average
return
Market PFIZER DRREDDY SUNPHARMA GLENMARK SHALBY
42
Interpretation of table 2 and 3
-Total risk :- Shalby Ltd have the highest total risk of 56.90% followed by
Glenmark Pharmaceuticals Ltd, Sun Pharmaceuticals Industries Ltd, Dr Reddys
Laboratories Ltd, and Pfizer Ltd with total risk of 48.69%, 33.3%, 31.20% and
28.89% respectively. Hence, Shalby Ltd shows the highest volatility in the
returns whereas Pfizer Ltd with teh lowest volatility.
-Systematic risk :- as the results of systematic risk also Shalby Ltd faces the
highest systematic risk with 1.015 % followed by Glenmark Pharmaceuticals
Ltd, Sun Pharmaceuticals Industries Ltd, Dr Reddys Laboratories Ltd, and Pfizer
Ltd. with risk of 0.801, 0.664, 0.449, 0.342 respectively. This shows that shalby
volatile more than the market dose and Pfizer Ltd is the least volatile with the
market volatility.
-Risk-return relationship :- As mentioned above there should be high risk

high return and vice versa only three companies are following that i.e. Sun
Pharmaceuticals Industries Ltd, Dr Reddys Laboratories Ltd, and Pfizer Ltd.
with the return of 0.16%, 0.12%, and 0.07% respectively. On the other hand
Glenmark Pharmaceuticals Ltd and Shalby Ltd is providing lower return i.e.
0.15% and 0.12% respectively with the highest risks.
-Suggestion :- Sun Pharmaceuticals Industries Ltd. is the better option for

investors because it is giving higher return with low risk among the selected
companies
5.2 Companies included in IT sector with analysis and
interpretation
5.2.1 Infosys Ltd (INFOSYS)
-About :- Infosys Ltd. offers technology, consulting, outsourcing, and next-
generation digital services to help businesses carry out their digital
43
transformation initiatives. It ranks after TCS as India's second-largest
information technology business.
5.2.2 LTI Mindtree Ltd (LTI MINDTREE)

-About :- Enterprise solutions, infrastructure management services, testing,
digital solutions, and platform-based solutions are just a few of the many IT
services that Larsen & Toubro Infotech Ltd. provides to clients in a variety of
sectors.
5.2.3 Cyient Ltd (CYIENT)

-About :- Cyient specialises on GIS, engineering design, analytics, network, and
operations solutions while offering worldwide technology services and
solutions.
5.2.4 Birlasoft Ltd (BIRLA SOFT)

-About :- Computer programming, consulting, and other related operations are
all done by Birlasoft. It serves clients primarily in the banking, financial services,
insurance, life sciences, energy resources and utilities, and manufacturing
industries by developing software and offering IT consultancy. Pune serves as
the company's registered office. Birlasoft is a division of The CK Birla Group
and employs approximately 10,000 people in total.
5.2.5 Mastek Ltd (MASTEK)

-About :- Mastek is a company that offers business IT solutions that are vertically
focused. It was founded in 1982. Mastek Ltd. has approximately 40 years of
experience in the IT business and has transformed from an IT solutions supplier
to a partner in digital transformation.
44
5.2.6 Data analysis and interpretation of IT sector.
Table 4. Market capital of the selected IT companies
IT CO. MARKT.
CAP
INFOSYS 6,63,542
LTI MINDTREE 1,40,237
CYIENT 10,143
BIRLA SOFT 8,020
MASTEK 4,683
(Source: screener (2023)
Market cap.
700,000 663,542
600,000
500,000
400,000
300,000
200,000
140,237
100,000
10,143 8,020 4,683
0
MRKT. CAP
INFOSYS LTI MINDTREE CYIENT BIRLA SOFT MASTEK
45
Table 5. Average returns of IT sector companies with total risk (standard
deviation)
IT companies Standard Average
deviation return
Market 25.22% 0.09%
INFOSYS 32.35% 0.21%
LTI 41.77% 0.31%

MINDTREE
CYIENT 47.37% 0.19%
BIRLA SOFT 56.57% 0.49%
MASTEK 60.23% 0.48%
Average returns of IT sector companies

with total risk(standard deviation)
60.23%
56.57%
47.37%
80.00%
41.77%
60.00% 0.48%
32.35% 0.49% MASTEK
40.00% 0.19% BIRLA SOFT
25.22% CYIENT
0.31%
20.00% 0.21% LTI MINDTREE
0.09% INFOSYS
0.00% Market
standard average
deviation return
Market INFOSYS LTI MINDTREE CYIENT BIRLA SOFT MASTEK
46
Table 6. Average returns of IT sector companies with systematic risk
(beta)
IT companies Beta Average
return
Market 1.000 0.09%
CYIENT 0.653 0.19%
LTI 0.729 0.31%
MINDTREE
MASTEK 0.799 0.48%
INFOSYS 0.842 0.21%
BIRLA SOFT 1.034 0.49%
Average returns of IT sector companies with

systematic risk (beta)
1.034
0.842
1.500 0.799
1.000 0.729
0.653 0.49%
1.000 0.21% BIRLA SOFT
0.48% INFOSYS
0.31% MASTEK
0.500 0.19% LTI MINDTREE
0.09% CYIENT
0.000 Market
Beta average
return
Market CYIENT LTI MINDTREE MASTEK INFOSYS BIRLA SOFT
47
-Total risk :- Mastek Ltd has the highest total risk of 60.23% followed by
Birlasoft Ltd, Cyient Ltd, LTI Mindtree Ltd and Infosys Ltd with lowest total
risk i.e. 56.23%, 47.37%, 41.77%, and 32.35% respectively. So, Mastek Ltd
shows the highest volatility in the returns where as Infosys Ltd with the lowest
volatility.
-Systematic risk :- Birlasoft Ltd shows the highest systematic risk of 1.034
followed by Infosys Ltd, Mastek Ltd, LTI Mindtree Ltd and Cyient Ltd with the
beta of 0.42, 0.729, 0.653 respectively. Therefore, Birlasoft Ltd. is most volatile
with the market and Cuient Ltd. is least volatile with the market volatility.
-Risk-return relationship :- Birlasoft Ltd, Mastek Ltd, and LTI Mindtree

Ltd follows the High risk high return and vice versa with the return of 0.48%,
0.49%, and 0.31% respectively while Infosys Ltd and Cyient Ltd is giving low
returns of 0.21% and 0.19% respectively against their higher risk.
-suggestion :- Birlasoft Ltd, Mastek Ltd is good for risk taker investor as it
gives high risk and high return whereas LTI Mindtree Ltd and Infosys for the
risk neutral investors as they gives moderate return foe moderate risk taken by
investor.
5.3 Companies included in real-estate sector with analysis

and interpretation.
5.3.1 DLF Ltd (DLF)
-About :- Real estate development includes everything from the search for and
purchase of property to the design, implementation, building, and marketing of
projects, according to DLF Ltd and its subsidiaries, affiliates, and JVs. As part
of the general growth of the real estate industry, it is also involved in the leasing,
power generating, maintenance, hotel, and recreational business.
48
5.3.2 Godrej Properties Ltd (GODHREJ PROP)
-About :- The Godrej Group was founded in 1897 and is now one of India's most
prosperous conglomerates. Godrej Properties Limited (GPL) is the real estate
development division of the Godrej Group. The Godrej Group's innovation,
sustainability, and excellence-focused philosophies are brought to the real estate
sector via Godrej Properties.
5.3.3 Prestige Estates Projects Ltd (PRESTIGE ESTATES)

-About :- Prestige Estate Projects is in the real estate development sector, which
includes building and developing properties as well as renting out office and
retail space.
5.3.4 Brigade Enterprises Ltd (BRIGADE ENTERPRISE)

-About :- In 1986, Brigade Enterprises Ltd. was founded. It is a South Indian
real estate developer with a base in Bengaluru that is also growing into other
regions of India. In the residential, office, retail, and hospitality sectors, it has
constructed more than 250 structures totaling more than 70 million square feet
throughout Bengaluru and Mysuru, Chennai, Ahmedabad, Hyderabad, Kochi,
and other cities.
5.3.5 Puravankara Ltd

-Market Capitalization :- 2,056 (small CAP)
-About :- Real estate development and sales are the company's primary activities.
Major areas like Bengaluru, Hyderabad, Chennai, Kolkata, Mumbai, Pune, and
Goa are the sites of several projects. The company has finished 74 projects
totalling 43 million square feet.
49
5.3.6 Data analysis and interpretation of Real-estate sector.
Table 7. Market capital of the selected Real-estate companies

REAL ESTATE CO. MRKT. CAP
DLF 89,435
GODHREJ PROP 32,541
PRESTIGE ESTATE 16,273
BRIGADE ENTERPRISE 11,304
PURAVANKARA 2,055
LIMITED
Graphical representation of Table 7
Market cap.
100,000
89,435
90,000
80,000
70,000
60,000
50,000
40,000
32,541
30,000
20,000 16,273
11,304
10,000
2,055
0
DLF GODHREJ PROP PRESTIGE ESTATE BRIGADE PURAVANKARA
ENTERPRISE LIMITED
50
Table 8. Average returns of Real-estate sector companies with total risk
Real estate standard Average
Market 25.22% 0.09%
DLF 50.54% 0.13%
GODHREJ PROP 50.95% 0.16%
BRIGADE 51.69% 0.22%
ENTERPRISE
PRESTIGE 57.19% 0.11%
ESTATE
PURAVANKARA 58.66% 0.22%
LIMITED
Average returns of Realestate sector

deviation)
58.66%
57.19%
51.69%
50.95%
50.54%
60.00%
0.22%
40.00% PURAVANKARA LIMITED
25.22% 0.11%
0.22% PRESTIGE ESTATE
0.16% BRIGADE ENTERPRISE
20.00% GODHREJ PROP
0.13%
0.09% DLF
Market
0.00%
Market DLF GODHREJ PROP

BRIGADE ENTERPRISE PRESTIGE ESTATE PURAVANKARA LIMITED
51
Table 9. Average returns of Real-estate sector companies with systematic
risk (beta)
Real estate companies Beta Average
return
Market 1.000 0.09%
BRIGADE 0.860 0.22%
ENTERPRISE
PURAVANKARA 0.932 0.22%
LIMITED
PRESTIGE ESTATE 1.072 0.11%
GODHREJ PROP 1.206 0.16%
DLF 1.355 0.13%
Average returns of Realestate sector

companies with systematic risk
(beta)
1.355
1.206
1.072
1.400 0.932
1.200 0.860
1.000
1.000
0.13%
0.800 0.16% DLF
0.11% GODHREJ PROP
0.600
0.22% PRESTIGE ESTATE
0.400 PURAVANKARA LIMITED
0.22%
0.200 0.09% BRIGADE ENTERPRISE
Market
0.000
Beta average
return
Market BRIGADE ENTERPRISE PURAVANKARA LIMITED
PRESTIGE ESTATE GODHREJ PROP DLF
52
-Total risk :- Puravankara Ltd manifests highest total risk with the standard
deviation of 58.66% followed by Prestige Estates Projects Ltd, Brigade
Enterprises Ltd, Godrej Properties Ltd, DLF Ltd with the standard deviation of
57.19%, 51.69%, 50.95%, 50.54% respectively. It reflects that Puravankara Ltd
high volatility in returns while DLF Ltd has lows volatility in return.
-Systematic risk :- Almost all the selected real-estate

Companies have high systematic risk. DLF Ltd with beta of 1.355, Godrej
Properties Ltd with beta of 1.206, by Prestige Estates Projects Ltd with beta
1.072, Puravankara Ltd with beta 0.932, Brigade Enterprises Ltd with beta 0.860.
Hence, all the stock volatile with the market volatility.
-Risk-return relationship :- if we look at the total risk all the stocks in

following high risk high retun and vice versa except Prestige Estates Projects
Ltd with high risk and low return of 0.11%. As all the stocks beta is high all the
companies are giving comparatively lower return and not following High risk
high return and vice versa
-Suggestion :- Brigade Enterprise Ltd id better option for investor as it is

giving higher returns among all the stocks with comparitively low risk. while
investors of DLF Ltd will face highest risk with lowest returns.
5.4 Companies included in FMCG sector with analysis and
interpretation.
5.4.1 Nestle India Ltd
-About :- A subsidiary of the Swiss multinational corporation Nestlé is Nestle
India Ltd. The business is involved in the food industry.
53
5.4.2 Colgate-Palmolive (India) Ltd (COLGATE PULMOLIVE LTD)
-About :- The manufacture and trading of toothpaste, tooth powder,
toothbrushes, mouthwash, and other personal care items is done by Colgate-
Palmolive India Ltd.
5.4.3 Emami Ltd

-About :- With an impressive portfolio of well-known brand names including
BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Kesh King, Zandu
Pancharishta, Mentho Plus Balm, and others, Emami manufactures and markets
personal care and healthcare goods.
5.4.4 Zydus Wellness Ltd (ZYDUS WELLNESS)

-About :- Zydus Wellness does business as an integrated consumer company,
covering every step of the health and wellness products development,
manufacture, marketing, and distribution value chains. The company's product
line has names including Sugar free, Everyuth, and Nutralite.
5.4.5 L T Foods Ltd

-About :- In the 1980s, LT Foods Ltd was formed. Its main activities include the
production of rice food items for the domestic and international markets as well
as the milling, processing, and selling of branded and unbranded basmati rice. It
also conducts research and development to improve the quality of rice and rice-
based foods. Brown rice, white rice, steamed rice, parboiled rice, organic rice,
rapid cooking rice, value added rice, and flavoured rice are all included in the
company's range of rice products for the ready to cook market. The category for
ingredient-based organic foods is led by the company's subsidiary, Nature Bio
Foods Ltd (NBFL). It has become a reputable brand, providing consumers in the
US and European markets with real organic ingredients.
54
Table 10. Market capital of the selected FMCG companies
FMCG MRKT. CAP
NESTLE INDIA LTD 1,85,706
COLGATE PULMOLIVE LTD 39,680
EMAMI LTD 17,192
ZYDUS WELLNESS 9,390
L T FOODS LTD 3,373
Market Cap.
200,000 185,706
180,000
160,000
140,000
120,000
100,000
80,000
60,000
39,680
40,000
17,192
20,000 9,390 3,373
0
NESTLE INDIA COLGATE EMAMI LTD ZYDUS L T FOODS LTD
LTD PULMOLIVE WELLNESS
LTD
55
Table 11. Average returns of FMCG sector companies with total risk
FMCG companies Standard Average
deviation return
Market 25.22% 0.09%
COLGATE 24.70% 0.02%

PULMOLIVE LTD
NESTLE INDIA 27.32% 0.06%
LTD
ZYDUS 28.90% 0.07%
WELLNESS
EMAMI LTD 40.84% 0.14%
L T FOODS LTD 56.23% 0.28%
Average returns of FMCG sector

deviation)
56.23%
40.84%
60.00% 28.90%
50.00% 27.32%
0.28%
40.00% 24.70% 0.14% L T FOODS LTD
25.22% EMAMI LTD
30.00% 0.07%
0.06% ZYDUS WELLNESS
20.00% NESTLE INDIA LTD
0.02%
10.00% 0.09% COLGATE PULMOLIVE LTD
Market
0.00%
standard average
deviation return
Market COLGATE PULMOLIVE LTD NESTLE INDIA LTD

ZYDUS WELLNESS EMAMI LTD L T FOODS LTD
56
Table 12. Average returns of FMCG sector companies with systematic risk
(beta)
FMCG companies beta Averag
e
return
Market 1.00 0.09%
0
ZYDUS WELLNESS 0.28 0.07%
8
COLGATE 0.40 0.02%
PULMOLIVE LTD 3
NESTLE INDIA LTD 0.52 0.06%
3
EMAMI LTD 0.58 0.14%
0
L T FOODS LTD 0.81 0.28%
8
Average returns of FMCG sector

companies with systematic risk (beta)
0.818
0.580
1.000
1.000 0.523
0.800 0.403 0.28%

0.14% L T FOODS LTD
0.600 0.288 EMAMI LTD
0.06%
0.400 0.02% NESTLE INDIA LTD
0.07% COLGATE PULMOLIVE LTD
0.200 ZYDUS WELLNESS
0.09%
Market
0.000
beta average
return
Market ZYDUS WELLNESS COLGATE PULMOLIVE LTD

NESTLE INDIA LTD EMAMI LTD L T FOODS LTD
57
Interpretation of Table 11 and 12
-Total risk :- L T Foods Ltd is with highest total risk with standard deviation
of 56.23% followed by Emami Ltd, Zydus Wellness Ltd, Nestle India Ltd,
Colgate-Palmolive (India) Ltd with standard deviation of 40.84%, 28.90%,
27.32%, 24.70% respectively . Therefore L T Foods LTD shows te highest
volatility in the returns and Colgate-Palmolive (India) Ltd shows lowest
volatility in returns.
-Systematic risk :- Beta of almost all the selected is low except L T Foods
Ltd. i.e. 0.818 others companies like Emami Ltd, Nestle India Ltd, Colgate-
Palmolive (India) Ltd, Zydus Wellness Ltd with beta of 0.580, 0.532, 0.403,
0.288 respectively. Hence, the selected FMCG stocks are not that volatile with
the market except L T Foods Ltd.
-Risk-return relationship :- By looking at standard deviation of the

companies it is clear that high risk high return and vice versa pattern is seen.
But while looking at beta except Zydus Wellness Ltd all the stocks follow high
risk high return and vive versa.
-Suggestion :- This sector is generating lowest return among all the sector.
still the risk seeker who wants to invest in FMCG company only can invest in L
T Foods Ltd and Emami Ltd.
5.5 Companies included in Automobile sector with analysis and

interpretation.
5.5.1 Mahindra & Mahindra Ltd (M & M)
-About :- Mahindra & Mahindra Ltd. is one of India's most well-rounded
automakers, offering 2-wheelers, 3-wheelers, PVs, CVs, tractors, and
earthmovers. Through its subsidiaries and group companies, it is also present in
the following industries: financial services, auto components, hospitality,
infrastructure, retail, logistics, steel trading and processing, IT businesses,
58
agribusiness, aerospace, consulting services, defence, energy, and industrial
equipment. Ghulam Mohammad and two Mahindra Brothers (KC and JC
Mahindra) formed it in 1945, and in 1948 it changed its name to Mahindra &
Mahindra.
5.5.2 Eicher Motors Ltd (EICHER MOTORS)

-About :- The 1982-founded Eicher Motors Limited is the Eicher Group's listed
firm in India, a major participant in the country's automotive market, and the
world's top manufacturer of middleweight motorcycles. Volvo Eicher
Commercial Vehicles Ltd is a joint venture between Eicher and AB Volvo of
Sweden (VECV). VECV operates trucks and buses, sells auto parts, and provides
technical consulting services.
5.5.3 Hero MotoCorp Ltd

-Market capitalization :- 50,670 (large CA)
-About :- One of India's original motorbike manufacturers is Hero Moto Corp,
formerly known as "Hero Honda." In a technological partnership with Honda,
Japan, the business was founded in 1984. Before to this partnership, Hero sold
Bikes under the name Hero Cycles. The joint venture was terminated in 2011
when the Honda group sold the Munjals (promoters) a 26% ownership in the
business. The firm was renamed Hero Motocorp once the JV was terminated.
5.5.4 Escorts Kubota Ltd (ESCORTS KUBOTA)

-About :- One of the top engineering companies in India, Escorts Ltd. produces
agri-machinery, construction and material handling equipment, and railroad
equipment.
5.5.5 Force Motors Ltd (FORCE MOTORS)

-Market capitalization :- 1,696
-About :- The Abhay Firodia group's flagship firm, Force Motors Ltd, was
founded in 1958. The firm produces compact and light commercial vehicles
(CVs), multi-utility vehicles (MUVs), and agricultural tractors, which it exports
59
to a number of nations in the Middle East, Asia, South America, and Africa. Up
until 2005, it was known as Bajaj Tempo.
Table 13. Market capital of the selected Automobile companies

AUTOMOBILE MRKT. CAP
M&M 1,71,505
EICHER MOTORS 90,577
Hero MotoCorp Ltd 50,670
ESCORTS KUBOTA 26,951
FORCE MOTORS 1,696
Market Cap.
200,000
180,000 171,505
160,000
140,000
120,000
100,000 90,577
80,000
60,000 50,670
40,000 26,951
20,000 1,696
0
M&M EICHER Hero MotoCorp ESCORTS FORCE
MOTORS Ltd KUBOTA MOTORS
60
Table 14. Average returns of Automobile sector companies with total risk
Automobile standard Average
Market 25.22% 0.09%
Hero MotoCorp 35.88% 0.02%
Ltd
EICHER 36.71% 0.07%
MOTORS
M&M 42.27% 0.11%
ESCORTS 46.38% 0.22%
KUBOTA
FORCE 47.74% 0.04%
MOTORS
Average returns of Automobile sector

deviation)
47.74%
46.38%
42.27%
36.71%
50.00% 35.88%
40.00% 0.04%
0.22% FORCE MOTORS
25.22% ESCORTS KUBOTA
30.00% 0.11%
0.07% M&M
20.00%
0.02% EICHER MOTORS
10.00% 0.09% Hero MotoCorp Ltd
Market
0.00%
standard average
deviation return
Market Hero MotoCorp Ltd EICHER MOTORS M&M ESCORTS KUBOTA FORCE MOTORS
61
Table 15. Average returns of Automobile sector companies with systematic
risk (beta)
Automobile Beta Average
companies return
Market 1.000 0.09%
Hero MotoCorp Ltd 0.866 0.02%
EICHER MOTORS 0.898 0.07%
M&M 1.049 0.11%
FORCE MOTORS 1.066 0.04%
ESCORTS KUBOTA 1.120 0.22%
Average returns of Automobile sector

companies with systematic risk
(beta)
1.120
1.066
1.049
0.898
1.200 1.000
0.866 0.22%
1.000 ESCORTS KUBOTA
0.04%
0.800 0.11% FORCE MOTORS
0.600 0.07% M&M
0.400 0.02% EICHER MOTORS
0.200 0.09% Hero MotoCorp Ltd
Market
0.000
beta average
return
Market Hero MotoCorp Ltd EICHER MOTORS M&M FORCE MOTORS ESCORTS KUBOTA
62
-Total risk :- Force Motors Ltd is having highest total risk with the standard
deviation of 47.74% followed by, Escorts Kubota Ltd, Mahindra & Mahindra
Ltd, Eicher Motors Ltd, Hero MotoCorp Ltd. with standard deviation of 46.38%,
42.27%, 36.71%, 35.88%, 25.22%. So Force Motors Ltd is having most volatile
rturn in COVID phase whereas Hero MotoCorp Ltd. having least.
-Systematic risk :- Beta of three companies Escorts Kubota Ltd, Force

Motors Ltd and M & M Ltd. is 1.120, 1.066, and 1.049 respectively which is
above 1 that means they are more volatile than the market volatility. Eicher
Motors Ltd and Hero MotoCorp Ltd. having beta of 0.898 and 0.866
respectively which is also nearer to 1 hence they are also having almost similar
volatility with the market. Overall systematic risk of automobile stock is higher
according to the return they are providing.
-Risk-return relationship :- By examining Average returns of Automobile

sector companies with total risk and Average returns of Automobile sector
companies with systematic risk. It was clear that every company is following
high risk high return and vice versa pattern except Force Motors Ltd which is
having highest risk among all with lower return of 0.04%.
-Suggestion :- Overall the automobile stocks is providing lower return

according to their risks. only risk taker investorn should invest in this sector.
63
Chapter-6 Conclusion
6. Conclusion
This research assess risk return study of India's top five industries with selected
stocks throughout COVID pandemic considering the period of 2 years by
employing statistical tools like mean, standard deviation, Beta etc. calculated in
excel sheet. Before making a choice, each investor carefully balance risk and
return. Risk and return are important concepts in financial management and
portfolio analysis since they allow investors to evaluate the likelihood of
problems in investing while estimating the benefits from the same. The study's
findings identify the industries with favorable risk-return relationships during
the COVID pandemic. The law of risk and return states that there is a direct
relationship between risk and return, with higher risks being associated with
higher potential returns. Conclusion is drawn by comparing the findings with the
above stated law of risk and return.
The findings from study, Healthcare sector stocks has given average returns
around 0.7% - 0.15% during the crisis period further there is not proper risk
return relationship in the stocks of the sector, Shalby Ltd is giving lower average
return with highest risk which does not blend with the law of risk and return. As
per my observations many people thinks that Healthcare sector stocks has given
highest return during the COVID pandemic period but the picture is different.
From the findings of this study IT sector stocks has given the highest average
return i.e between 0.20% - 0.50% during this difficult period of stock market.
Further while considering total risk i.e standard deviation, IT sector stocks are
having good risk return relationship as per the law of risk and return. Risk return
of IT sector stocks doesn’t match to the law while taking into account systematic
risk i.e Beta. The selected real-estate sector stocks has given the average return
of around 0.10% – 0.22%. While observing total risk all the stocks of Real-estate
sector followed the law of risk and return except Prestige Estates Projects Ltd.
With higher total risk and lower average return. In contrast, while examining
beta with average return it was found that the stock with higher beta has lower
return and vice versa which is totally opposite to risk return law which shows
64
lack of good risk return relationship. Moving forward it was observed that Real-
estate stocks are having highest total risk as well as systematic risk among all
the selected sectors stocks during the COVID pandemic. Stocks of FMCG sector
of India has generated lower average returns comparing to above selected sectors
around 0.02% – 0.28% during the COVID pandemic. But, has perfect risk return
relationship according to law while observing average return with total risk. Risk
return relationship of FMCG sector stocks while observing systematic risk was
not as perfect as observing wit total risk. As FMCG sector stocks Automobile
sector stocks has also generated lower average return around 0.02% – 0.22%
during COVID pandemic. Risk return relation of all the stocks was according to
the law of risk and return except Force Motors Ltd. by looking at total risk as
well as systematic risk. Therefore the selected stocks of FMCG sector was
having better risk return relationship among all the sector stocks during COVID
pandemic.
65
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“Risk return study of India's top five industries stocks throughout

Under the Guidance of

Signature Signature Signature

Name of External Examiner Signature of External Examiner

Name and Signature of the learner

I would like to thank my College Library, for having provided various

1.1.1 History of risk

1.1.2 Meaning of risk

1.1.3 Definitions of risk by different authors

J.C Van Horne defines, “Risk is the variability of potential returns of a

According to Lawrence, 1976, “Risk is the measure of probability and the

According to Risk Management Vocabulary ISO 2002, “Risk is a

Campbell, 2005 defines, “Risk equals expected damage.”

Rosa 1998 defines, “Risk as a situation or event where something of human

According to Risk Management, ISO, 2009, “Risk is the effect of uncertainty

1.1.4 Types of risk

(Source: Author’s own compiled data)

-Types of systematic risk

Purchasing power risk or Inflation risk

Unrest among manufacturing workers, changes in regulations, and a lack of

Unsystematic risks, as opposed to systematic risks, can be managed,

-Types of Unsystematic risk

1.1.5 Measuring risk

1.2.1 Types of return

(Source: Author’s own compiled data)

1.2.2 Rate of return

Two inputs are necessary to determine a rate of return:

Rate of Return % = [(Current Value – Initial Value) / Initial Value] x 100

Average Return = Sum of Returns / Number of Returns

(Source: Author’s own compiled data)

-Modern Portfolio Theory

-Capital Asset Pricing Model

In order to quantify this systemic risk, CAPM was developed. It is frequently

An investor is intended to be able to control their risk by using the CAPM to

-Fama-French three-factor model

Whether the outperformance trend is caused by market efficiency or market

Rahul Moolbharathi and Tukaram Sugandi (2021) Considering how

Nikhitha MH and Satyendra Singh 2020 Of the different investing options,

P.Karthika and P. Karthikeyan 2011 Most individual investors base their

3.1 Objective of study

3.2 Statistical tools

S.D. = Square root of the variance

Beta = covariance (Ri, Rm) / variance (Rm)

4. India’s top five industries

4.3 Real-estate Industry

4.4 FMCG industry

5. Data analysis and interpretation

5.1Companies included in health sector with analysis and

5.1.2 Dr Reddys Laboratories Ltd (DR REDDYS LAB)

5.1.5 Shalby Ltd (SHALBY)

Table 1. Market capital of the selected health care companies

DR REDDYS LAB 75,624

GLENMARK PHARMA 12,118

(Source: screener (2023))

Graphical representation of Table 1.

(Source: Author’s own compiled data)

PFIZER 28.89% 0.07%

DRREDDY 31.20% 0.12%

SUNPHARMA 33.43% 0.16%