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An Analytical Study of Business Risk and Financial Risk of Selected Industries in India


Affiliations
1 Assistant Professor, Department of Management Studies, Saradha Gangadharan College, Puducherry., India
2 Assistant Professor, Department of Commerce, Saradha Gangadharan College, Puducherry., India
3 Assistant Professor, PG Department of Commerce, Saradha Gangadharan College, Puducherry., India
     

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In India, post economic liberalisation period starting from early 1990s opened up new vistas for rapid development of Indian stock markets accompanied by high volatility in stock exchanges. The volume of trade increased rapidly with more number of retail investors beginning to invest in equity shares of listed companies in specific industry sectors. This brought to the fore the importance of analysis of business and financial risks associated with such investment decisions. Every rational investor will do well to analyse the risk and return before investing in any stock or security. The investment process must be considered in terms of both risk and return. The present study deals with the estimation of business risk and financial risk of the selected companies in selected industries, based on empirical analysis. For the study, six industries such as Automobile, Cement, Paint, Paper, Pharmaceuticals and Personal Care(FMCG) have been selected from the Indian industries from April 1996 to March 2020. The findings of the study revealed the extent of the relationship between business and financial risk and return in specific sectors of industry in India.

Keywords

Business Risk, Financial Risk, Return, Volatility, Regression..
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  • An Analytical Study of Business Risk and Financial Risk of Selected Industries in India

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Authors

T. Muthukumaran
Assistant Professor, Department of Management Studies, Saradha Gangadharan College, Puducherry., India
S. Natarajan
Assistant Professor, Department of Commerce, Saradha Gangadharan College, Puducherry., India
S Kumar
Assistant Professor, PG Department of Commerce, Saradha Gangadharan College, Puducherry., India

Abstract


In India, post economic liberalisation period starting from early 1990s opened up new vistas for rapid development of Indian stock markets accompanied by high volatility in stock exchanges. The volume of trade increased rapidly with more number of retail investors beginning to invest in equity shares of listed companies in specific industry sectors. This brought to the fore the importance of analysis of business and financial risks associated with such investment decisions. Every rational investor will do well to analyse the risk and return before investing in any stock or security. The investment process must be considered in terms of both risk and return. The present study deals with the estimation of business risk and financial risk of the selected companies in selected industries, based on empirical analysis. For the study, six industries such as Automobile, Cement, Paint, Paper, Pharmaceuticals and Personal Care(FMCG) have been selected from the Indian industries from April 1996 to March 2020. The findings of the study revealed the extent of the relationship between business and financial risk and return in specific sectors of industry in India.

Keywords


Business Risk, Financial Risk, Return, Volatility, Regression..

References