Risk-Adjusted Performance of Defence Stocks Listed on Nse: An Empirical Study (Fy 2021–2026)

Dr. P. Shalini1, Mr. J. Mithun Venkata Sai2
1Dr. P. Shalini, Assistant Professor, Department of Master of Business Administration, Panimalar
Engineering College, Chennai – 600123
2Mr. J. Mithun Venkata Sai, Student, Panimalar Engineering College, Chennai - 600123

Abstract:This study aims at examining the risk and performance of stock in the selected defence sector that are trading on the National Stock Exchange (NSE) of India during the period FY 2021 - 2026. The companies were selected for the study include Astra Microwave Ltd, BEML Ltd, Bharat Dynamics Ltd, Bharat Electronics Ltd, Cochin Shipyard Ltd, Garden Reach Shipbuilders Ltd, Hindustan Aeronautics Ltd, Mazagon Dock Shipbuilders Ltd, Solar Industries India Ltd, and Zen Technologies Ltd. The defence sector has gained significant importance due to increased government spending, policy support, and growing emphasis on self-reliance in defence production. The study is based on secondary data collected over a period of five years from FY 2021 to FY 2026. Various financial and statistical tools are used to evaluate the performance of the stocks. These are the annual return analysis, coefficient of variation to measure consistency, beta computation to measure market risk and the risk-adjusted performance measure like Sharpe ratio, Treynor ratio, Jensen’s alpha and Compound Annual Growth Rate (CAGR) is used to analyse long-term performance. The findings of the study reveal that defence stocks have delivered strong returns compared to the broader market, though with varying levels of risk and volatility. The study concludes that defence stocks offer significant growth potential and serve as a valuable portfolio addition, though investors must carefully evaluate risk and return for long-term stability and gains.