High beta stocks are shares that have greater volatility than the overall market. Beta is a measure of a stock’s sensitivity to market movements. A beta higher than 1.0 indicates the stock moves more aggressively than the market. For example, if a stock has a beta of 1.5, it will likely move 50% more than the market. The best high beta stocks offer more significant potential for gains but carry higher risk.
These stocks typically show high market volatility and are great for short-term traders looking to capitalise on price movements. Here is a beta stocks list.
| Stock Name | Sub-Sector | Market Cap (in Cr) | Share Price |
|---|---|---|---|
| IndusInd Bank Ltd | Private Banks | ₹1,25,440 | ₹1,441.7 |
| Bajaj Finserv Ltd | Insurance | ₹2,51,647 | ₹1,582.5 |
| Bajaj Finance Ltd | Consumer Finance | ₹4,48,641 | ₹7,070.7 |
| Tata Motors Ltd | Four Wheelers | ₹2,99,848 | ₹800.45 |
| Hindalco Industries Ltd | Metals – Aluminium | ₹1,24,179 | ₹541.4 |
| Axis Bank Ltd | Private Banks | ₹3,38,508 | ₹1,089.25 |
| Adani Enterprises Ltd | Commodities Trading | ₹3,32,754 | ₹2,896.55 |
| Tata Steel Ltd | Iron & Steel | ₹1,61,095 | ₹130.1 |
| State Bank of India | Public Banks | ₹5,60,733 | ₹605.1 |
| Mahindra and Mahindra Ltd | Four Wheelers | ₹1,93,643 | ₹1,595.2 |
High beta stocks are ideal for investors with high-risk tolerance. These stocks can lead to significant returns in a bullish market but also suffer from significant declines during bearish periods. If you have a long-term investment plan and can handle the market’s ups and downs, high beta stocks can be rewarding.
Beta is calculated by comparing the stock’s price movements to that of the overall market. To calculate beta, you first need historical price data for both the stock and the benchmark index (NSE, in this case).
The formula used is:
Beta = Covariance (stock, market) / Variance(market)
Covariance measures how much the stock’s returns move with the market, while variance measures how much the market itself fluctuates.
You can easily find the high beta stocks using financial platforms and stockbroking apps. Websites like NSE India provide stock beta data. Beta is also available on various trading terminals and portfolio management tools.
Let’s briefly discuss the top high beta stocks as per NSE’s beta stocks list:
Known for providing a broad range of banking and financial services to both corporate and retail clients, IndusInd Bank is a well-known financial institution in India. This 53rd-ranked stock has a market value of ₹1,07,014 cr and is 2.56 times more volatile than the Nifty. It is among the top businesses on the Indian stock market for 2024, with the most excellent beta value stocks.
Known for its customer-centric approach, Bajaj Finserv Ltd is a diversified financial services firm based in India. It provides wealth management, lending, and insurance solutions. This stock is rated 23 and has a market capitalisation of ₹2,36,850 cr. It is 2.22 times more volatile than the Nifty.
A prominent player in the retail finance industry, Bajaj Finance Ltd. is an Indian non-banking financial company (NBFC). It specialises in lending to consumers and small businesses. This stock fluctuates 2.24 times more than the Nifty. With a market valuation of ₹4,33,456 cr, the stock is placed 10th among the finest high beta stocks. It is volatile due to its extensive lending business and fluctuations in consumer credit demand.
Tata Motors Ltd is among the best high beta stocks listed on NSE. Tata Motors achieved an astounding yearly growth rate of 25% in the last 12 months, generating an operating revenue of Rs. 401,785.26 Cr. The return on equity (ROE) is now at 5%, indicating a fair performance with space for development, while the pre-tax margin is at 1%, suggesting an opportunity for improvement. It’s among India’s best high beta stocks.
Hindalco is a significant player in the metals sector, which is significantly affected by global commodity prices. Over the last 12 months, Hindalco Industries’ operating revenue amounted to Rs. 216,168.00 Cr. The company continues to grow at a noteworthy rate of 14% annually, with a pre-tax margin of 6% and a strong return on equity (ROE) of 10%. It is among the best businesses for intraday trading, with high beta stocks measured by beta.
In the previous 12 months, Axis Bank produced an astounding Rs. 123.23 billion in operating revenue. The bank has an impressive yearly revenue increase of 23% and an excellent pre-tax margin of 18%. Even though it is currently 8%, the return on equity (ROE) might be higher.
Over the previous 12 months, Adani Enterprises (NSE) produced an astounding Rs. 105,914.06 Cr. in operational income, demonstrating exceptional yearly development of 96%. Though the pre-tax margin, which is currently at 2%, may be improved, and the fair ROE of 7% should also be raised.
Sensitive to commodity markets, particularly steel prices and global demand. Tata Steel made Rs. 235,216.69 crore over the previous year. Even though the annual revenue didn’t change, it could have been better. At 7%, the pre-tax margin is deemed suitable. Fairness is indicated by the ROE of 8%, although there is still room for improvement. It is among the best stocks in India for 2024, with a high beta value.
SBI is the largest public sector bank in India, fluctuating with changes in interest rates and fiscal policies. In the previous 12 months, the State Bank of India produced an astounding Rs. 540,660.26 Cr. in operating revenue. It has accomplished an impressive 16% annual revenue growth rate. It is one of the top stocks on the NSE 2024 high beta stock list. It also boasts a solid pre-tax margin and a commendable 16% Return on Equity (ROE).
In the previous 12 months, Mahindra & Mahindra produced a healthy operating revenue of Rs. 131,312.94 Cr. Notably, the business maintained a robust pre-tax margin of 10%, an extraordinary return on equity (ROE) of 18%, and an excellent yearly revenue growth of 34%.
Beta helps in understanding a stock’s risk profile relative to the market. Investors use beta to assess how much risk they are taking by investing in a particular stock. It also helps calculate the expected returns using the Capital Asset Pricing Model (CAPM).
To invest in the best high beta stocks, follow these steps:
Investors who can handle volatility and have high risk tolerance should consider investing in high beta stocks. These stocks are not for conservative investors or those seeking stable returns. Traders looking for quick gains during market rallies might find high beta stocks suitable.
Before diving into high beta stocks, consider these factors:
High beta stocks usually belong to sectors like finance, metals, and auto. They react to changes in government policies, interest rates, and market sentiments. They often see rapid gains during bullish phases but face steep declines in bearish phases.
These are the risks of investing in high beta stocks:
These stocks can be highly unpredictable. Investors may face significant losses in short periods. High beta stocks can fluctuate dramatically based on market conditions.
These include reliance on past data. High beta stocks may not always perform the same way. Historical beta values do not guarantee future movements.
Beta is based on historical performance. Future market conditions might differ, affecting stock movements unpredictably.
The best high beta stocks provide the opportunity for significant returns when the market trends upward. For aggressive investors, these stocks help capture short-term gains. High beta stocks also contribute to a diversified portfolio, as their movement differs from low beta or defensive stocks.
High alpha stocks generate better returns than the benchmark index due to strong company performance. Low beta stocks, on the other hand, have lower volatility compared to the overall market. These are more stable and less affected by market fluctuations, making them suitable for risk-averse investors.
The best beta stocks in NSE offer exciting opportunities for those with a high tolerance for risk. They allow investors to gain more during bullish markets but require caution during downturns. Factors like market conditions, industry trends, and company performance play a crucial role in determining returns. Always remember to research well before investing in high-beta stocks, as they come with significant risks but also great rewards for savvy investors.
Although they are thought to be riskier, high-beta stocks have a higher potential return. Low-beta stocks, on the other hand, have a lesser potential return but also less risk. Which is better will depend on your style of investing.
All other definitions are based on the market’s overall beta of 1. It is greater than one indicates. This kind of a stock is more volatile than the market. It will typically rise or fall more than the market as a whole.
A stock with a beta greater than 1.0 moves more than the market as a whole over time. A stock’s beta is less than 1.0 if it moves less than the market. Although they may carry greater risk, high-beta stocks can offer greater potential rewards. Although they carry less risk, low-beta equities usually have lesser returns.
The volatility increases with the beta value. Having a portfolio of high-beta growth firms that can beat the index makes sense for aggressive investors. Growth stocks typically have a high beta, while blue-chip stocks usually have a low beta.
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