A Comparative Risk–Return Analysis of Selected Indian Pharmaceutical Companies Listed on NSE (2016–2025)

Sangeeta Khandelwal; Shilpi Bagga

doi:10.36948/ijfmr.2026.v08i03.79187

A Comparative Risk–Return Analysis of Selected Indian Pharmaceutical Companies Listed on NSE (2016–2025)

Author(s)	Sangeeta Khandelwal, Shilpi Bagga
Country	India
Abstract	The pharmaceutical industry occupies a significant position in the Indian economy and has emerged as one of the most resilient sectors within the capital market. The present study examines the risk-return characteristics of selected pharmaceutical companies listed on the National Stock Exchange (NSE) of India over the period 2016–2025. Five leading pharmaceutical companies—Sun Pharmaceutical Industries, Divi's Laboratories, Torrent Pharmaceuticals, Lupin Limited, and Dr. Reddy's Laboratories—were selected for analysis. The study employs financial and statistical tools such as average return, standard deviation, beta, coefficient of variation, and Sharpe ratio to evaluate stock performance and risk-adjusted returns. The NIFTY 50 index was used as the benchmark for measuring systematic risk. For the computation of Sharpe ratios, the study utilized year-wise average yields of 10-year Government Securities (G-Sec) issued by the Government of India as proxies for the risk-free rate, thereby incorporating prevailing market conditions during the study period.The findings reveal considerable variation in the risk-return profiles of the selected companies. Divi’s Laboratories Ltd. generated the highest average return, whereas Torrent Pharmaceuticals Ltd. demonstrated superior risk-adjusted performance due to comparatively lower volatility and a higher Sharpe ratio. Furthermore, the beta values of all selected companies were below one, indicating lower sensitivity to market fluctuations and highlighting the defensive nature of pharmaceutical stocks. The study concludes that pharmaceutical stocks provide portfolio diversification benefits and relatively stable investment opportunities during uncertain market conditions. The findings may assist investors, portfolio managers, and researchers in making informed investment decisions within the Indian pharmaceutical sector.
Keywords	Risk-Return Analysis, Defensive Stocks, Indian Capital Market, Beta, Standard Deviation, Sharpe Ratio
Published In	Volume 8, Issue 3, May-June 2026
Published On	2026-05-22
DOI	https://doi.org/10.36948/ijfmr.2026.v08i03.79187

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A Comparative Risk–Return Analysis of Selected Indian Pharmaceutical Companies Listed on NSE (2016–2025)

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