The data underscores the familiar risk-reward trade-off in equity investing — high beta stocks deliver higher upside during bullish phases but come with greater volatility, whereas low beta stocks tend to limit drawdowns during market corrections.
An ETMarkets analysis of Ace Equity data shows that, out of 272 stocks with a one-year beta above 1, a total of 266 have been listed for at least a year. Among these, 49% (130 stocks) delivered gains of up to 99%, while 51% (135 stocks) declined by as much as 73%. Within this high-beta basket, 34% (91 stocks) posted double-digit gains, whereas 38% (100 stocks) saw double-digit losses.
Among the 226 low beta stocks, 224 have completed at least 1 year of listing. In this, 46% (102 stocks) posted positive returns up to 74% while 54% (122 stocks) have ended in the red over a 1-year period, falling as much as 58%. Within this group, 34% (76 stocks) delivered double-digit gains while 36% (80 stocks) witnessed double-digit declines.
Meanwhile, BSE Sensex’s 1-year returns are to the tune of 5% while the fear index IndiaVix has plunged 22% during this period and is currently hovering around 12.
The beta is with respect to the benchmark BSE Sensex. Beta (β) is a measure of a stock’s volatility or risk compared to the overall market. In simple terms, it tells you how much a stock’s price tends to move when the market moves.
Returns snapshot of high beta stocks
Laurus Labs tops the table with 99% returns and is followed by RBL Bank, L&T Finance and HBL Engineering, which have yielded 85%, 83% and 81%, respectively. The top 10 gainers also feature Authum Investment & Infrastructure, One 97 Communications (Paytm), Maharashtra Scooters, Gujarat Mineral Development Corporation (GMDC), Garden Reach Shipbuilders & Engineers (GRSE), and eClerx Services, which have delivered returns ranging between 59% and 76% during the same period.
Other widely tracked stocks like Bajaj Finance, Godfrey Phillips India, Bharat Dynamics (BDL), Bharat Electronics (BEL), TVS Motor Company, Waaree Energies, Adani Power, Mazagon Dock Shipbuilders, Eternal, Tata Steel, Kotak Mahindra Bank and Bajaj Finserv have also seen impressive rallies, helping prices jump between 51% and 20% in the past year.
The steepest decline was seen in Aditya Birla Fashion and Retail (ABFRL), which plunged 73%, followed by Sterling and Wilson Renewable Energy, Tejas Networks, and Siemens, down 61%, 57%, and 55%, respectively. The top 10 laggards also include Praj Industries, Brainbees Solutions, Jindal Saw, Network18 Media & Investments, Natco Pharma, and Punjab & Sind Bank (PSB), which fell between 39% and 52%.
Tata Motors Passenger Vehicles (erstwhile Tata Motors) has spun off after demerging its commercial vehicles segment into TML Commercial Vehicles (yet to be listed) has not been taken into the equation.
Widely tracked stocks like Rail Vikas Nigam (RVNL), REC, Adani Green Energy, Trent, OLA Electric Mobility, SJVN, Kalyan Jewellers India, Infosys Container Corporation Of India (CONCOR), Indian Railway Finance Corporation (IRFC) and PVR Inox have also fallen in double-digits.
High beta stocks that have not completed 1 year of listing include Ventive Hospitality, Sai Life Sciences, Swiggy, Vishal Mega Mart, NTPC Green Energy and Inventurus Knowledge Solutions.
Low beta stocks: Returns snapshot
JSW Holdings emerged as the top performer among stocks with a 1-year beta below 1 (0.58), delivering an impressive 74% return. It is followed by Manappuram Finance, Fortis Healthcare and Muthoot Finance with returns of 71%, 70% and 62% respectively. Among the other top 10 performers are Anand Rathi Wealth, Aster DM Healthcare, Navin Fluorine, Narayana Hrudayalaya, Indian Bank, Ceat and AU Small Finance Bank with returns in the range of 61% to 44%.
Widely tracked stocks like Maruti Suzuki, FSN E-Commerce Ventures (Nykaa), InterGlobe Aviation (Indigo), Hyundai Motor India, Bharti Airtel and SBI Life Insurance Company have also yielded double-digit returns up to 44%.
The notable laggards in the pack were SKF India, Vedant Fashions, Relaxo Footwears and Ramkrishna Forgings with share prices eroding by 58%, 50%, 41% and 40%, respectively. Meanwhile, BASF India, Cohance Lifesciences, Jyothy Labs, KNR Constructions, Carborundum Universal and Carborundum Universal were among the other 10 big underperformers falling between 39% and 34%.
Widely tracked stocks like Honasa Consumer (mamaearth), Tata Consultancy Services (TCS), IndusInd Bank and Varun Beverages have also declined between 31% and 20%.
The most volatile stock in the BSE 500 index is Swan Corp with a 1-year beta of 1.867 and negative returns of 4.4%. The next in line are JBM Auto (1.8658) and HFCL (1.8557), which have negative returns of 14% and 37%, respectively.
Meanwhile, the most stable stock in the pack is CCL Products (India) with a 1-year beta of just 0.574 and returns of 32%. It is followed by Metro Brands (0.575) and Kansai Nerolac Paints (0.5770), both falling by 4% and 12% in the said period.
(Data Inputs: Ritesh Presswala)
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)
