Top 6 low-risk stocks which have given high-returns | Low-beta stocks - YouTube

Hi! As the stock market behaves like a pendulum between extreme fear and extreme greed,

it becomes important for investors to fasten their seat belts and move forward in their investment journey while managing risk.

There is no risk-free return in the stock market and no matter how much people say on social media, there is no stock that never goes to the bottom.

You must have heard that where the risk is high, the return is also high and where the risk is low, the return is low.

But there are some stocks that give high returns with comparatively less risk. Now you will ask how investors can assess the risk of investing in any stock.

It's hard to tell precisely, but there is one popular indicator from which we can get some idea, and that statistical indicator is Beta.

Beta is an indicator of the volatility of any stock relative to the stock market.

By definition, the Sensex or Nifty 50 has a beta of 1.0 and individual stocks are ranked according to how much they deviate from the market.

If a stock has a beta above 1.0, it swings more relative to the stock market movement.

And remember its movement is not much in either direction compared to the market then its Beta is less than 1.

Generally, high beta stocks are riskier but give higher returns and low beta stocks are relatively less risky and give lower returns.

But in this video we will tell you about 6 such low-beta, that is, low-risk stocks that have given good returns to their investors in the last 5 years.

We've listed only those companies that have :

In this video, we have considered the market closing price on 2nd August 2022 i.e. Tuesday.

We will cover the list in the ascending order of returns i.e. the company which has the highest CAGR return for 5 years, we will cover it at the end.

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So let's start today's video.

The first company is Pidilite Industries Limited.

Pidilite Industries is a leading manufacturer of Adhesives, Sealants, Construction Chemicals, Craftsman Products, DIY Products, and Polymer Emulsions in India.

The company has given a 25.58% CAGR return in the last 5 years and the beta of the company's stock is 0.79.

In our country, adhesives and glues from years are known as 'Fevicol'. Fevicol which is a Pidilite brand enjoys strong consumer loyalty in the market.

Apart from this, the company also has strong brands like Dr. Fix It, Fevy Quick, Rangeela, M-Seal, Araldite, etc.

It has done a strong marketing campaign across all its flagship products which in time has kept its audience and customers 'sticking' with the company.

With the company's diverse distribution network and strong advertising support, the company has built a strong chain of 4,700 distributors, servicing 200,000 dealers, retailers, and contractors.

It has maintained a strong competition barrier over the years due to the company's strong pan-India presence, affordable pricing range, and value-adding product ranges.

The company posted very weak numbers in the last quarter of FY22.

The company's margins took a huge hit due to the increase in the prices of the company's input raw material.

Its direct impact can be seen on the profitability of the company.

Now you can see the key financial and technical ratios of the company on the screen.

Another company is Apollo Hospitals Enterprise Limited.

Apollo Hospitals started its operations in 1983 from Apollo Chennai, which was also India's first corporate hospital.

The company has 71 hospitals and a capacity of 9,911 beds as of March 31, 2022.

Of these, the company has 44 hospitals under its ownership, in the form of subsidiaries, JV and Associates.

The company has given a 27.83% CAGR return in the last 5 years and the Beta of the company's stock is 0.91.

Its pharmacy business is turning into a major force for the company. It is already a market leader in hospitals and healthcare.

With this, the company has around 4,292 standalone pharmacy stores of Apollo Pharmacy Limited.

Apollo Hospitals also acts as an exclusive supplier to these stores.

The company is getting a good boost because of the constant addition of Apollo Pharmacy stores in the country.

From FY 2015 to 2021, the company witnessed 18% compounded growth in this segment.

The company has achieved sales growth of 17% in the last 10 years and has witnessed compound profit growth of 15%.

A risk factor for the company is the regulatory environment of this segment.

When the government capped the prices of medical procedures and devices such as cardiac stents and knee implants in 2017, the company's profits and margins were significantly impacted.

Any such regulatory action may affect the profits of the company.

Let us now take a look at the financial and technical ratios of the company.

The third company is Avenue Supermarts Ltd.

Avenue Supermarts is in the organized retail business segment through its chain of DMart stores.

Radhakishan Damani, who is also a well-known investor, incorporated the company in the year 2000.

The company has given a 36.52% CAGR return in the last 5 years and the Beta of the company's stock is 0.91.

A good thing for the company is its strong market position in the organized retail segment.

The company has around 284 stores available in India covering an area of ​​approximately 11.5 million square feet.

The company's strong buying capabilities and low-cost products help the company to achieve maximum footfall.

Along with this, the company also takes good care of cost control due to which the company has got a good inventory turnover and a healthy revenue per sq ft.

The Company's Inventory Turnover Ratio was 12.8 in FY 21-22 while the company's Revenue per Retail Business Area Square Feet saw a growth of 1% on a year-on-year basis.

A major risk factor for the company going forward is the increasing competition in this segment, as the company's gross margins may take a short-term hit in the times to come.

Bigbasket, Grofers, and other entrants like Jiomart can give tough competition to the company.

Now you can see the key financial and technical ratios of the company on the screen.

The next company is Tata Consumer Products Limited.

Tata Consumer Products is one of the leading Tata Group companies with a presence in the food and beverage business, They are not only in India but also in international markets.

It is the second largest tea company in the world and they are a significant player in other product markets as well.

The company has given a 37.25% CAGR return in the last 5 years and the beta of the company's stock is 0.96.

It has transformed itself from a 'global beverage' company to an India-focused food and beverage company in the last two years and has set a platform for the Tata Group's FMCG ambitions.

The company has been on a strong growth trajectory for the first two years, with it gaining a market share of 2-5.5% in its tea and salt segment.

Simultaneously, they have ramped up the promotion and branding of the segment with growth drivers such as Sampanna - Value Added Salts, Nourish Company, and Coffee.

Tata Consumer Products Limited has grown its revenues at a CAGR of 14% in the last two years with its business in India accounting for 21%.

The company's EBITDA during the same tour has grown at a CAGR of 15% mainly from their tea business.

The company mainly deals in categories like tea and salt.

These products already have high penetration and further growth is highly dependent on consumers upgrading from non-branded or regionally branded products to branded products.

But weak consumer sentiment and continued high inflation or act against premiumization could cause a major dent in Tata Consumer Products' growth.

Simultaneously, the company is venturing into new categories such as breakfast cereals, ready-to-eat meals, staples, etc. The segments are still not profitable.

The company has disproportionately invested in these categories, which could put pressure on its near-term margins.

Now you can see the key financial and technical ratios of the company on the screen.

The 5th company is Divi's Laboratories Ltd.

Divis Lab is involved in the manufacture and export of Advanced Pharmaceutical Ingredients (APIs), Intermediates, and Nutraceutical Ingredients.

The company has a market presence in 95 countries and is one of the world's leading pharma companies with 140,000 employees.

They have a portfolio of 122 products in various therapeutic areas.

The company has given a 41.68% CAGR return in the last 5 years and the Beta of the company's stock is 0.81.

Divi's has recently invested heavily in capacity expansion which is helping them in supplying intermediates and absorbing geopolitical risk.

The company plans to invest an additional ₹20-30 billion for capacity expansion and upgradation in the next 2-3 years.

The company has a capital expenditure plan to tap the US market for US$20 billion worth of molecules, which will be patented in 3-5 years.

Divi's management team sees great potential in these molecules.

The company's flagship products such as generic molecules are witnessing weak demand in the market.

Also, sitagliptin, one of their flagship products, is nearing its patent expiration, which is in January 2023.

The product contributes to the revenue of USD 60 million and going off-patent could hit the revenue and profitability of the company.

Now you can see the key financial and technical ratios of the company on the screen.

The last company on the list is Larsen & Toubro Infotech Limited.

L&T Infotech is an IT services provider which is a subsidiary of Larsen & Toubro Limited.

It specializes in IT Services Application Development, Maintenance, Enterprise Solutions, Infrastructure Management Services, Testing, Analytics, AI, and Cognitive Services.

The company announced the merger proposal with Mindtree on May 06, 2022.

After the merger, the combined entity will be named 'LTI Mindtree Limited' in which 68.73% shares will be held by Larsen & Toubro Limited.

The company has given a 43.22% CAGR return in the last 5 years and the Beta of the stock of the company is 0.95.

The company's market position and competencies are strong in its core areas of work.

The company's dependency on top 5, 10, and 20 clients is reducing due to good growth in the digital arena and the addition of new clients.

The active customers of the company have increased from 261 as on 31st December 2017 to 486 as on 31st March 2022.

A potential risk that the company faces is Mr. Sanjay Jalona's exit from the company.

Sanjay has recently resigned from the position of CEO and MD of the company.

Under his leadership, the company has shown strong growth in the last 7 years and has roped in several senior leaders from Tier-1 companies to charter the aggressive growth of LTI's Journey.

His exit may show a change in the attrition in these senior-level positions.

At the same time, successfully navigating the company's expected merger with Mindtree may prove to be a bit challenging for the new CEO and MD.

Now you can see the key financial and technical ratios of the company on the screen.

So these were those 6 companies whose Beta is less than 1 and have given very good returns in the last 5 years.

We remind you that this video is for educational purposes only, and is not a buy or sell recommendation of any kind.

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