Risk And Return Analysis And Equity Share Prices In It Sector At Karvy Financial Services Ltd

Abstract

The Indian Information Technology (IT) sector has been a cornerstone of economic development and innovation, attracting widespread investor interest. This study titled "Risk and Return Analysis and Equity Share Prices in IT Sector" focuses on five major IT companies—Infosys, TCS, Wipro, HCL Technologies, and Tech Mahindra—to evaluate their stock performance over a five-year period from 2020 to 2024. The primary objective is to assess the relationship between risk and return associated with these equity shares to support investment decision-making. The tool employed for the analysis is Standard Deviation, which measures the volatility or risk associated with the stock returns. Historical stock prices for the selected companies are analyzed to compute average annual returns and standard deviation, providing insights into each company's risk-return profile. Findings from the study show variation in the risk levels among the selected companies. While some firms, like TCS and Infosys, demonstrate relatively stable returns with lower risk, others like Tech Mahindra and Wipro show higher levels of volatility, indicating greater uncertainty in returns. These differences are essential for investors aiming to balance their portfolios according to their individual risk appetites. This study contributes valuable information for investors, financial analysts, and portfolio managers by highlighting which IT stocks offer the best return per unit of risk. The analysis also helps in understanding how consistent performance, market trends, and sectoral developments influence share price behavior over time. The study concludes with recommendations for optimal investment strategies within the IT sector based on the findings.