Best High Beta Stocks in India

  • 14 May 2024
  • Read 21 mins read

Beta stocks are extremely volatile equities that respond quickly to market movements. It measures a stock's volatility in comparison to the general market. The stock market generally has a value of 1.0. The rank of various companies depends on how far they are from this value of 1.0. A greater value than 1.0 indicates that a stock's volatility exceeds that of the market. If a stock fluctuates less than the market, its beta value is less than one. High-beta stocks are a popular investment choice for traders seeking better profits.   

Let’s learn about high beta in stocks in this blog and also look at some of the top beta stocks in India.

What are High Beta Stocks?

High-beta stocks are stocks with a beta coefficient larger than one, suggesting that they are more volatile than the overall market. These stocks tend to have bigger price fluctuations in either direction than the market, giving them high-risk, high-reward opportunities. So their share prices are extremely volatile and respond quickly to market movements. All share market instruments have a stock beta. It is calculated using market performance and the company's fundamental strength to assess risk and return.

 

Top 10 High Beta Stocks in NSE

There are several high beta NSE stocks. Here’s the top 10 high beta stock list.

CompanyShare PriceMarket Cap ( in Cr.)
IndusInd Bank LtdRs. 1,482.05Rs. 1,15,564
Bajaj Finserv LtdRs.  1,619.00Rs. 2,58,596
Tata Motors LtdRs. 963.20Rs. 3,19,178
Hindalco Industries LtdRs. 614.75Rs. 1,37,934
Axis Bank LtdRs. 1,029.10Rs. 3,18,302
Tata Steel LtdRs. 162.10Rs. 3,19,178
State Bank of IndiaRs. 750.00Rs.  6,67,025
Mahindra and Mahindra LtdRs. 2,082.90Rs. 2,59,020
Adani Enterprises LtdRs. 3,026.95Rs. 3,45,072
ICICI Bank LtdRs. 1,067.25Rs. 7,48,657

Disclaimer: This list of semiconductor stocks contains data updated as of 19th April 2024. However, it's important to conduct detailed research before making any investment decisions in these stocks.

High Beta Stocks in NSE

Let’s go through a quick overview of the high-beta Indian stocks on the NSE.

  • IndusInd Bank Ltd.

    IndusInd Bank Ltd., founded in 1994, is a banking firm. The bank’s present stock price is Rs. 1,482.05 with a market capitalisation of Rs 1,15,564 crore. For the quarter ending December 31, 2023, the firm reported a Consolidated Total Income of Rs 13,968.17 Crore, up 3.24% from the previous quarter's Total Income of Rs 13,529.68 crores and up 21.11% from the same period last year of Rs 11,533.89 crore. In the recent quarter, the bank declared a net profit after tax of Rs 2,301.49 crore.
  • Bajaj Finserv Ltd

    Bajaj Finserv Ltd., founded in 2007, is a large-cap firm in the NBFC industry. It offers insurance, loan, and wealth management products and is well-known for its customer-centric approach. The current stock price of Bajaj Finserv is Rs. 1,619.00. Its market capitalisation is Rs. 2,58,596. The firm reported an income of Rs 29,038.43 crore in the last quarter.
  • Tata Motors Ltd.

    Tata Motors Ltd., formed in 1945, has a current share price of Rs. 963.20. Tata Motors produced an amazing operating revenue of Rs. 3,19,178 Cr. during the last 12 months, representing a phenomenal 25% annual growth rate. While the pre-tax margin is 1%, showing space for development, the return on equity (ROE) is now 5%, indicating fair performance with scope for improvement. In the previous quarter, the firm earned a net profit after tax of Rs 6,952.17 crore in the current quarter.
  • Hindalco Industries Ltd

    Hindalco Industries Ltd. was formed in 1958. The company operates in the Metals - Non-Ferrous industry. The company's market capitalisation is Rs. 1,37,934 crores. Key products are copper and fertilisers. The firm declared a net profit after tax of Rs 2,330.00 crore in the most recent quarter, which concluded on December 31, 2023. Over the last 12 months, Hindalco Industries produced operating revenue of Rs. 216,168.00 crore. With a noteworthy annual growth rate of 14%, the firm maintains a pre-tax margin of 6% and a strong return on equity (ROE) of 10%.
  • Axis Bank Ltd-

    Axis Bank Ltd., founded in 1993, is a banking firm with a market capitalisation of Rs. 3,18,302 crore. Its present share price is Rs. 1,029.10. The bank posted a net profit after tax of Rs 6,491.66 crore in the previous quarter. Axis Bank had a Rs. 123.23 billion operational revenue during the previous year. With a phenomenal 23% yearly revenue increase, the bank has an impressive pre-tax profit of 18%. While the return on equity (ROE) is 8%, there is space for growth in this area.
  • Tata Steel Ltd

    Tata Steel Ltd., founded in 1907, is a large-cap corporation that operates in the Metals - Ferrous industry. Its current share price is Rs. 162.10, with a market capitalisation of Rs. 3,19,178 crore. In the last quarter, the company had a net profit after tax of Rs 448.74 crore. In the last quarter, the company declared a net profit after tax of Rs 448.74 crore.
  • State Bank of India

    State Bank of India, founded in 1955, is a banking firm with a market capitalisation of Rs 664,794.34 crore. In the previous 12 months, the State Bank of India achieved an amazing operating revenue of Rs. 540,660.26 crore. Notably, it achieved a spectacular yearly revenue growth rate of 16%, along with a solid pre-tax margin and a noteworthy Return on Equity (ROE) of 16%. In the previous quarter, the bank declared a net profit after tax of Rs 11,064.14 crore.
  • Mahindra and Mahindra Ltd

    Mahindra & Mahindra Ltd., founded in 1945, is a large-cap corporation that operates in the automotive sector. Mahindra & Mahindra reported a strong operating revenue of Rs. 2,59,020 Cr. in the previous year. Notably, the firm saw an astounding 34% annual sales increase while maintaining a strong pre-tax margin of 10% and an extraordinary return on equity (ROE) of 18%. It is presently on the top high beta Indian stocks.
  • Adani Enterprises Ltd

    Adani Enterprises Ltd., founded in 1993, is a large-cap firm with a current share price of Rs. 3,026.95. At present, it’s market capitalisation of Rs. 3,45,072 crores. It is engaged in various industries. For the quarter ended December 31, 2023, the firm reported a Consolidated Total Income of Rs 28,826.53 Crore, a 24.97% increase over the previous quarter's Total Income of Rs 23,066.03 Crore and a 6.96% increase over the same period last year. In the last quarter, the company declared a net profit after tax of Rs 1,917.67 crore.
  • ICICI Bank Ltd

    ICICI Bank Ltd. was formed in 1994. The current share price is Rs.1,067.25, and the market capitalisation is Rs 747,499.89 crore. The Bank reported Standalone Non-Performing Assets (Gross NPAs) at.00% of total assets and Standalone Net Non-Performing Assets (Net NPAs) at.00% of total assets for the quarter ended December 31, 2023. In the last quarter, the firm reported a consolidated total income of Rs 7,48,657 Crore. The bank had a net profit after tax of Rs 11,052.60 crore in the previous quarter.

What are High Alpha and Low Beta Stocks?

High alpha and low beta stocks produce high returns relative to their risk. Their beta coefficient indicates this and these stocks are often less volatile than the overall market. This is because the beta coefficient of high alpha low beta stocks is less than one. However, their alpha coefficient indicates that they give larger returns than the market.

Should You Invest in High Beta Stocks?

The decision to invest in high-beta stocks depends on two factors. They are dependent on your trading experience and your risk tolerance.

Your Trading Experience 

Experienced traders or investors possess a deeper understanding of the share market. They are better at analysing market fluctuations. This helps them to enter and exit a trade and also balance their exposure to a particular stock. They also consider domestic and international market factors when researching stocks. This makes experienced investors better prepared to invest in a high-beta stock. If you are new to investing, you need first learn about the markets before investing in beta high stocks

Your Risk Tolerance And Expected Returns

High-beta stocks are generally risky but have the potential to create significant gains. As a result, you invest in them only if you can afford to take high risk. You should avoid investing in these stocks if your risk appetite is low. When the market weakens, such equities might fall sharply. So, you will incur losses till the market regains strength.  

How is Beta Calculated in High Beta Stocks NSE?

Beta value is a measure of a stock's volatility, which is calculated by comparing the returns of the stock and the overall market. This value of the whole market is considered as 1. A stock with a value of more than 1 is regarded as more volatile than the market, while a company having a value of less than 1 is considered less volatile than the market. To determine the beta of high beta stocks NSE, analysts often employ regression analysis to compare its returns to the returns of a relevant market index, such as the NSE. 

How to Find the Beta of Indian Stocks?

Follow the steps mentioned below to find the beta of Indian stocks. 

  1. Obtain historical prices for the stock.
  2. Obtain the historical prices for the benchmark index you’re comparing with.
  3. Calculate the percentage change for the same period for both the stock and the benchmark index. The period might be daily, weekly, monthly, etc.
  4. Calculate the stock’s variance.
  5. Find the stock's correlation with the benchmark.
  6. Finally, divide the covariance with variance. So, Beta = Covariance / Variance

What is the Importance of Beta in Stock Valuation?

Beta is an essential metric in stock valuation.  It shows a comparison between the risk of an individual stock and the entire market. Beta value actually measures and indicates how much the price of a stock may change as compared to the market. This can assist investors in assessing the possible risks and rewards associated with investment in that stock. 

How to Invest in High Beta Stocks NSE?

You have several choices for investing in such high beta firms on the NSE. You might explore investing in individual companies, high beta ETFs, or mutual funds. You may invest in futures and options, as well as create systematic investment plans (SIPs) for disciplined investing. However, always undertake sufficient research before investing in any of these.

Who Should Invest in High Beta Stocks?

Investing in high-beta stocks may be appropriate for investors who are ready to take on more risks. They may have a higher risk tolerance and a longer investing horizon. In addition, investors looking to invest in growth industries may choose high beta stocks. Such firms usually give exposure to market sectors that may grow in the future.

Factors to Consider When Investing in High Beta Shares

Consider the following factors before investing in high beta shares.

  • Industry Trends

    One of the most crucial elements to examine before investing in high beta stocks is industry trends. Investors should perform extensive studies to learn about the present and future outlook for the industry in which the firm works.  So, they are more sensitive to economic and global trends.
  • Performance of Companies

    The performance of a company is also an important factor. Investors should look at its financial statements (such as balance sheets), revenue growth, profit margins, and other pertinent data. Companies with good foundations and positive profit growth may provide more appealing investment prospects.
  • Market Conditions

    Market conditions can influence high beta stocks. Interest rates, inflation, and geopolitical events can impact the stock market including the performance of these stocks. As a result, before investing, it is critical to thoroughly analyse market circumstances.
  • Risk Tolerance

    You will have to take higher risks to invest in high beta stocks. These stocks are highly volatile, with large price changes over short periods. Investors should consider their risk tolerance before investing in these stocks.
  • Stock Valuation

    Investors should also check a stock's valuation before investing in it. Beta companies may be overpriced or undervalued, so investors should look at the price-to-earnings beta ratio (P/E ratio), price-to-book ratio (P/B ratio), etc. They must ensure a stock is a viable investment option.

Features of the Top High Beta Stocks NSE

Here are the key features of high beta stocks. 
 

  • Volatility amplification:

    High beta stocks tend to magnify market movements, exhibiting larger price changes than the market index. This may offer good investment opportunities for investors. However, it may be risky too.
  • Market sensitivity:

    High beta stocks are extremely sensitive to market sentiment. As the market swings, these stocks respond sharply. So, they are more sensitive to economic and global trends.
  • Growth potential:

    The high volatility associated with these companies may lead to growth. Investors seeking high-risk, high-reward prospects may find these stocks attractive.
  • Sectoral trends:

    These stocks are regularly found in specific sectors. Risks: While these stocks may tend to offer the potential for comparatively higher capital gains, the risks associated with such stocks are pretty high too. Investors should carefully consider their risk tolerance and investing objectives before purchasing these stocks.
  • Risks:

    While these stocks have the potential for higher gains, they also carry a higher level of risk. Investors should carefully examine their risk tolerance and investment goals before they  finally decide to include them in their portfolio.

Benefits & Risks of Investing in High Beta Stocks 

Let’s now understand the benefits and risks of investing in high beta stocks. Here’s a table highlighting the key ones.

Benefit of Investing in High Beta StocksRisk of Investing in High Beta Stocks
High beta stocks tend to outperform the market during upswings, offering the chance for significant gains.High beta stocks also experience larger swings in price, leading to potentially steeper losses during market downturns.
Strong returns from high beta stocks can outpace inflation, preserving the value of your investment.The future performance of high beta stocks is uncertain, making them more speculative investments.
High beta stocks are often associated with young, fast-growing companies with high growth potential.High beta stocks can be more sensitive to changes in interest rates, which can impact their price.

 

Conclusion 
High beta stocks often have higher beta coefficient values. They are very volatile, as share values may fluctuate fast. These stocks are too vulnerable to market fluctuations. Small changes in market sentiment or global events can cause big price variations. High beta stocks generally tend to have the potential to generate higher gains, but they also come with a greater amount of risk. Before investing in such stocks, you should properly assess your investment goals and risk tolerance. Consider your investment objectives, financial strength, and risk appetite to make educated investment decisions. Furthermore, you may invest in high beta stocks on a trusted online trading app that allows you to invest in all kinds of stocks. This will help you to diversify your portfolio with a variety of high beta stocks. 

FAQs on High Beta Stocks

Yes, high beta stocks might be suitable for intraday trading. These companies are more volatile than low beta stocks and display higher price movements over short periods. This makes them high beta stock for intraday. However, you should conduct thorough research before investing.

The appropriate beta for a company is determined by your investing objectives and risk tolerance. A beta of 1 often suggests that the stock moves in lockstep with the entire market. A beta larger than one indicates more volatility.

Yes, investors may earn from high beta equities listed on the NSE intraday trading. These stocks are more.

The risks associated with beta stocks include extreme price fluctuations and high sensitivity to the prevailing market conditions.

No, high beta stocks may not be suitable for all investors. Only investors with a high risk tolerance levels should consider investing in such stocks.