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beta value of companies.
It is important that one follows the Beta value as it tells us the volatility of a stock in comparison with the prevailing index. The point is to note that Low-beta stocks make Nifty less volatile and viceversa is also true. Beta=1 means that stock is moving in correlation with the index and one can almost expect returns equivalent to the index movement.
Defensives stocks like like pharma and FMCG generally have low beta value and is thus absorbing more volatility in the index by virtue of their inclusion.
To put the same in more easier language one can say that a low-beta stock means the stock price is less sensitive to the market movement. Hindustan Unilever, for instance, has a beta of 0.56, while DLF is around 1.5 and that explains the high volatility in the latter’s stock price. The beta compares the sensitivity of a stock’s price movement with the broader index. Higher the beta, higher will be the volatility in the stock price, and hence, riskier the investments. Lesser the beta, lesser will be the volatility in the stock price, and hence, it will be safer to invest in that stock. Hindustan Unilever, NTPC, Bharti Airtel, Cipla, GAIL, ITC and Sun Pharma are among stocks whose weightage in the index have gone up during the year.
Sno | Security Symbol | Security Name | Weightage | Beta |
1 | ABB | ABB Ltd. | 0.56% | 0.87 |
2 | ACC | ACC Ltd | 0.71% | 0.73 |
3 | AMBUJACEM | Ambuja Cements Ltd. | 0.70% | 0.86 |
4 | Axis Bank | Axis Bank Ltd. | 1.51% | 1.26 |
5 | BHARTIARTL | Bharti Airtel Ltd. | 4.06% | 0.99 |
6 | BHEL | Bharat Heavy Electricals Ltd. | 2.80% | 0.99 |
7 | BPCL | Bharat Petroleum Corporation Ltd. | 0.49% | 0.43 |
8 | CAIRN | Cairn India Ltd. | 0.80% | 1.1 |
9 | CIPLA | Cipla Ltd. | 1.03% | 0.51 |
10 | DLF | DLF Ltd. | 1.14% | 1.56 |
11 | GAIL | GAIL (India) Ltd. | 1.18% | 0.74 |
12 | GRASIM | Grasim Industries Ltd. | 1.49% | 0.8 |
13 | HCLTECH | HCL Technologies Ltd. | 0.41% | 1.09 |
14 | HDFC | Housing Development Finance Corporation Ltd. | 5.05% | 1.18 |
15 | HDFCBANK | HDFC Bank Ltd. | 4.09% | 0.9 |
16 | HEROHONDA | Hero Honda Motors Ltd. | 1.15% | 0.45 |
17 | HINDALCO | Hindalco Industries Ltd. | 0.86% | 1.19 |
18 | HINDUNILVR | Hindustan Unilever Ltd. | 2.42% | 0.41 |
19 | ICICIBANK | ICICI Bank Ltd. | 6.70% | 1.56 |
20 | IDEA | Idea Cellular Ltd. | 0.99% | 1.15 |
21 | INFOSYSTCH | Infosys Technologies Ltd. | 7.83% | 0.68 |
22 | ITC | ITC Ltd. | 5.08% | 0.5 |
23 | LT | Larsen & Toubro Ltd. | 7.01% | 1.18 |
24 | M&M | Mahindra & Mahindra Ltd. | 1.35% | 1.1 |
25 | MARUTI | Maruti Suzuki India Ltd. | 1.48% | 0.67 |
26 | NATIONALUM | National Aluminium Co. Ltd. | 0.20% | 0.99 |
27 | NTPC | NTPC Ltd. | 1.48% | 0.74 |
28 | ONGC | Oil & Natural Gas Corporation Ltd. | 3.11% | 0.89 |
29 | PNB | Punjab National Bank | 0.73% | 0.87 |
30 | POWERGRID | Power Grid Corporation of India Ltd. | 0.53% | 0.79 |
31 | RANBAXY | Ranbaxy Laboratories Ltd. | 0.34% | 0.77 |
32 | RCOM | Reliance Communications Ltd. | 1.47% | 1.52 |
33 | RELCAPITAL | Reliance Capital Ltd. | 0.80% | 1.56 |
34 | RELIANCE | Reliance Industries Ltd. | 11.04% | 1.23 |
35 | RELINFRA | Reliance Infrastructure Ltd. | 1.35% | 1.67 |
36 | JINDALSTEL | Jindal Steel & Power Ltd. | 1.49% | 1.13 |
37 | RPOWER | Reliance Power Ltd. | 0.49% | 1.03 |
38 | SAIL | Steel Authority of India Ltd | 0.81% | 1.31 |
39 | SBIN | State Bank of India | 3.70% | 1.08 |
40 | SIEMENS | Siemens Ltd. | 0.58% | 0.98 |
41 | STER | Sterlite Industries (India) Ltd. | 1.41% | 1.43 |
42 | SUNPHARMA | Sun Pharmaceutical Industries Ltd. | 0.70% | 0.41 |
43 | SUZLON | Suzlon Energy Ltd. | 0.45% | 1.64 |
44 | TATACOMM | Tata Communications Ltd. | 0.27% | 0.9 |
45 | TATAMOTORS | Tata Motors Ltd. | 0.79% | 1.2 |
46 | TATAPOWER | Tata Power Co. Ltd. | 1.53% | 0.91 |
47 | TATASTEEL | Tata Steel Ltd. | 1.77% | 1.46 |
48 | TCS | Tata Consultancy Services Ltd. | 1.94% | 0.89 |
49 | UNITECH | Unitech Ltd. | 0.96% | 1.7 |
50 | WIPRO | Wipro Ltd. | 1.18% | 0.92 |
Beta values of stocks junior Nifty traded on NSE as updated on 06 Oct 2009.
Security Symbol Security Name Industry Beta
ABIRLANUVO Aditya Birla Nuvo Ltd. TEXTILES - SYNTHETIC 1.01
ADANIENT Adani Enterprises Ltd. TRADING 0.97
ANDHRABANK Andhra Bank BANKS 0.83
APOLLOTYRE Apollo Tyres Ltd. TYRES 0.66
ASHOKLEY Ashok Leyland Ltd. AUTOMOBILES - 4 WHEELERS 0.89
ASIANPAINT Asian Paints Ltd. PAINTS 0.3
BANKBARODA Bank of Baroda BANKS 0.82
BANKINDIA Bank of India BANKS 0.96
BEL Bharat Electronics Ltd. ELECTRONICS - INDUSTRIAL 0.54
BHARATFORG Bharat Forge Ltd. CASTINGS/FORGINGS 0.89
BIOCON Biocon Ltd. PHARMACEUTICALS 0.76
CANBK Canara Bank BANKS 0.82
CHENNPETRO Chennai Petroleum Corporation Ltd. REFINERIES 0.75
CONCOR Container Corporation of India Ltd. TRAVEL AND TRANSPORT 0.32
CORPBANK Corporation Bank BANKS 0.69
CUMMINSIND Cummins India Ltd. DIESEL ENGINES 0.66
DRREDDY Dr. Reddy's Laboratories Ltd. PHARMACEUTICALS 0.46
GLAXO Glaxosmithkline Pharmaceuticals Ltd. PHARMACEUTICALS 0.08
GLENMARK Glenmark Pharmaceuticals Ltd. PHARMACEUTICALS 0.96
GMRINFRA GMR Infrastructure Ltd. CONSTRUCTION 1.25
HDIL Housing Development and Infrastructure Ltd. CONSTRUCTION 1.88
IDBI IDBI Bank Ltd. BANKS 1.23
IDFC Infrastructure Development Finance Co. Ltd. FINANCIAL INSTITUTION 1.5
IFCI IFCI Ltd. FINANCIAL INSTITUTION 1.61
INDHOTEL Indian Hotels Co. Ltd. HOTELS 0.76
IOB Indian Overseas Bank BANKS 1.01
HINDPETRO Hindustan Petroleum Corporation Ltd. REFINERIES 0.4
JPASSOCIAT Jaiprakash Associates Ltd. DIVERSIFIED 1.86
JSWSTEEL JSW Steel Ltd. STEEL AND STEEL PRODUCTS 1.43
KOTAKBANK Kotak Mahindra Bank Ltd. BANKS 1.34
LICHSGFIN LIC Housing Finance Ltd. FINANCE - HOUSING 1.15
LUPIN Lupin Ltd. PHARMACEUTICALS 0.44
MCDOWELL-N United Spirits Ltd. BREW/DISTILLERIES 1.11
MOSERBAER Moser Baer India Ltd. COMPUTERS - HARDWARE 1.23
MPHASIS Mphasis Ltd. COMPUTERS - SOFTWARE 0.72
MRPL Mangalore Refinery & Petrochemicals Ltd. REFINERIES 0.95
MUNDRAPORT Mundra Port and Special Economic Zone Ltd. TRAVEL AND TRANSPORT 0.85
OFSS Oracle Financial Services Software Ltd. COMPUTERS - SOFTWARE 0.83
PATNI Patni Computer Systems Ltd. COMPUTERS - SOFTWARE 0.74
PFC Power Finance Corporation Ltd. FINANCIAL INSTITUTION 0.83
RAYMOND Raymond Ltd. TEXTILE PRODUCTS 0.75
RNRL Reliance Natural Resources Ltd. GAS 1.44
SESAGOA Sesa Goa Ltd. MINING 0.99
SYNDIBANK Syndicate Bank BANKS 0.71
TECHM Tech Mahindra Ltd. COMPUTERS - SOFTWARE 1.09
TTML Tata Teleservices (Maharashtra) Ltd. TELECOMMUNICATION - SERVICES 0.87
ULTRACEMCO UltraTech Cement Ltd. CEMENT AND CEMENT PRODUCTS 0.61
UNIONBANK Union Bank of India BANKS 0.68
VIJAYABANK Vijaya Bank BANKS 0.83
WOCKPHARMA Wockhardt Ltd. PHARMACEUTICALS 0.74
The beta value is a measure of a stock's volatility in relation to the overall market. It is a commonly used metric in finance to gauge the risk of an individual stock in comparison to the overall market. A beta value of 1 indicates that the stock's price will move with the market, a beta value less than 1 means it is less volatile than the market and a beta value greater than 1 indicates that the stock is more volatile than the market.
A stock with a beta value of 1 has the same level of volatility as the overall market. For example, if the market increases by 10%, a stock with a beta value of 1 will also increase by 10%. A stock with a beta value greater than 1 is considered more volatile than the market, meaning that it is likely to see greater price movements than the overall market, both up and down. A stock with a beta value less than 1 is considered less volatile than the market, meaning that it is likely to see smaller price movements than the overall market.
Beta value is an important factor to consider when evaluating the risk of a stock, it should be used in conjunction with other factors such as financial performance, industry trends, and management. High beta stocks tend to be more volatile and therefore more risky, but they also have the potential to generate higher returns. Low beta stocks tend to be less volatile and therefore less risky, but they also have the potential to generate lower returns.