An Evaluation of Risk-Return Dynamics in The Indian Automobile Sector: A Study of Two-Wheeler and Four-Wheeler Companies

Abstract

Risk-Return Dynamics in the Indian Automobile Industry

The Indian automobile industry is vital to the nation's economy, making substantial contributions to GDP, jobs, and technical development. With growing disposable incomes, a shift toward personal mobility, and increased consumer demand, the industry is expected to continue growing in 2024.

This study compares companies in the two-wheeler and four-wheeler segments to examine the risk-return dynamics of equity securities in the Indian automobile industry. By examining stock performance over a five-year span (2019–2024), the study seeks to offer insightful information about the sector's investment potential, empowering investors to make better decisions.

Key financial indicators including return, standard deviation, beta, and alpha are used in the study to evaluate risk and performance. Given the sector's significance to the Indian economy and its changing environment, which includes a greater emphasis on electric cars (EVs), it is essential that investors understand these dynamics to manage risk and optimize investment strategies.

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