High Volatility Stocks in India: 10 Most Volatile Stocks in India

Introduction:

When investing in the securities market, you must be aware of the volatility you are dealing with when selecting a particular stock. This will be helpful for two reasons—either to stay vary of the stock to mitigate risk or to invest in the stock for gains through swing trades. Either way, making a list of such stocks helps you navigate the volatile market with the right strategy. So, let’s look at the top volatile stocks in the market and understand what classifies them as more volatile than the others. 

What are volatile stocks?

In the stock market, volatility refers to how much a security’s price fluctuates over time. It’s essential for investors and traders because it affects risk, strategies, and potential returns. Volatility can be seen as the movement of a pendulum. The more the pendulum swings from its center, the more volatile it is. Similarly, stocks with frequent and significant price changes are considered volatile.

Volatility is usually measured using statistical tools like standard deviation or Beta. Higher volatility means greater potential for returns but also more risk. With fast price fluctuations, highly volatile stocks are often favored for intraday trading as they offer better chances of quick returns.

How to identify Volatile Stocks?

One of the primary measures used by investors and shares advisory services to identify high-volatility stocks is Beta. Beta measures a stock’s volatility compared to its index. It reflects the systematic risk or volatility that traders must bear, which cannot be diversified or mitigated. The Nifty High Beta 50 index tracks ‘stock with highest volatility’, comparing them to their respective benchmark index’s Beta. The high risk-return ratio is a defining feature of these stocks. 

The scale for interpreting Beta is centered at 1. A Beta of one says the stock mirrors its index. If Beta is less than one, the stock is less volatile than the index, and if it’s greater than 1, the stock fluctuates more than the index. Small changes in the market sentiment can have a big impact on high-beta stocks, presenting opportunities for above-average returns. This volatility also increases demand, supply, and trading volume for these shares during the day. 

List of Most Volatile Stocks:

As per the Nifty High Beta 50 index, the top 10 most volatile stocks as of 30th September 2024, are as follows-

Company’s Name	CMP	Market Cap	Daily Volatility	Annualized Volatility
National Aluminium Co. Ltd.	226.21	41,546.45	2.89	55.21
Steel Authority of India Ltd.	116.90	48,285.84	2.82	53.88
REC Ltd.	522.00	1,37,454.29	3.04	58.08
Power Finance Corporation Ltd.	452.55	1,49,346.1	2.97	56.74
Hindustan Copper Ltd.	290.00	28,043.70	3.11	59
Vodafone Idea Ltd.	8.13	56,665.95	3.81	72.79
Housing & Urban Development Corporation Ltd.	204.20	40,878.80	3.6	69
Adani Ports and Special Economic Zone Ltd.	1,357.00	2,93,130.85	2.54	48.53
SJVN Ltd.	111.40	43,777.92	3.29	62.86
Adani Enterprises Ltd.	2,828.15	3,26,419.62	2.95	56.36

The list is based on the top ten stocks in the Nifty High Beta 50 index ranked by their weightage in the index as of 30th September 2024. The 1-year standard deviation for the index stands at 25.53, and the Beta is 1.56, with the benchmark being NIFTY50. The stocks are included in the index based on the following eligibility criteria-

• They should rank among the top 300 by average free-float market capitalization and daily turnover over the last six months.
• They need to have been listed for at least one year.
• Their trading frequency should have been 100% over the past year.
• Beta for each eligible company is calculated using one-year trailing prices, adjusted for corporate actions, and ranked in descending order.
• The top 50 securities with the highest beta are selected for the index.
• At each review, only securities with a beta greater than 1 are chosen. If none qualify, the highest-beta stock from the replacement pool is selected.
• The index review takes place every six months, ending on the last trading day of February, May, August, and November.

(Source: Index Factsheet NSE)

Overview of the high-volatility stocks:

1. National Aluminium Company Limited:

NSE Symbol	Beta	3-Year CAGR Profit	ROCE	P/E Ratio
NATIONALUM	2.22	15.2%	14.78%	20.65

(Source: MoneyControl as of 24th October 2024)

National Aluminium Company Limited (NALCO), a ‘Navratna’ CPSE, was established in January 1981, with its headquarters in Bhubaneswar. The Indian government currently holds 51.28% of its equity. NALCO is one of India’s largest integrated bauxite, alumina, aluminum, and power complexes and a major primary producer of aluminum in Asia.

NALCO was the first public sector company to enter the international metal market and get the London Metal Exchange registration in 1989. The company is focused on expansion, with major projects like the 5th stream Alumina Refinery, set to increase capacity from 2.1 million to 3.1 million tonnes. To support this, NALCO is developing the Pottangi bauxite mines, with leases already signed. Additionally, mining has begun at Utkal D & E coal mines, reducing coal procurement costs and boosting profits. In FY 2023-24, NALCO posted a net profit of Rs.2,060 crore, a 33% year-on-year increase.

(Source: Company Report)

2. Steel Authority of India Ltd.:

NSE Symbol	Beta	3-Year CAGR Profit	ROCE	P/E Ratio
SAIL	2.23	-9.6%	7.95%	13.41

(Source: MoneyControl as of 24th October 2024)

Steel Authority of India Limited (SAIL) is one of India’s largest steel producers and a Maharatna company. It is a state-owned enterprise, with the Government of India holding a 65% majority stake as of June 2024. SAIL operates five integrated plants and three special steel plants, mainly in the eastern and central regions of the country, close to key raw material sources. The company manufactures and sells a wide variety of steel products, including 25 new products introduced in FY 2023-24. In FY 2024, SAIL achieved its highest-ever sales turnover of Rs.1,04,545 crore, with an EBITDA of Rs.12,280 crore, reflecting 31% growth. The company also posted a net profit of Rs.2,733 crore, marking a 44% increase.

(Source: Company Report)

3. REC Limited:

NSE Symbol	Beta	3-Year CAGR Profit	ROCE	P/E Ratio
RECLTD	2.31	19.10%	68.62%	9.10

REC, a ‘Maharatna’ company under India’s Ministry of Power, is registered with the RBI as an NBFC, Public Financial Institution, and Infrastructure Financing Company. Since its start in 1969, REC has expanded its financing across the power sector, including Generation, Transmission, Distribution, Renewable Energy, Electric Vehicles, Battery Storage, and Green Hydrogen. It provides long-term loans and other financial products to state, central, and private entities for building infrastructure in India.

As of the June 2024 quarter, REC held a Loan Book of Rs.5,29,739 crore, with 89% of loans to the state sector. Its Net Worth was Rs.72,351 crore. Ranked 7th in net profit among 193 profit-making CPSEs (FY 2022-23), REC holds a “AAA” rating from IRRPL, CRISIL, and ICRA, with international ratings of “Baa3” from Moody’s and “BBB-” from Fitch. In Q1 FY 2025, it recorded disbursements of Rs.43,652 crore, with Net Interest Income of Rs.4,713 crore, a 30% YoY growth, and a Net Profit of Rs.3,442 crore.

(Source: Company Report)

4. Power Finance Corporation Limited:

NSE Symbol	Beta	3-Year CAGR Profit	ROCE	P/E Ratio
PFC	2.28	18.90%	67.44%	6.75

(Source: MoneyControl as of 24th October 2024

Incorporated in 1986, Power Finance Corporation Ltd. (PFC) is a Schedule-A Maharatna Central Public Sector Enterprise (CPSE). PFC offers various products and services for the power sector, including rupee-term loans, short-term loans, equipment lease financing, and transitional financing for projects in generation, transmission, and distribution. The company has several subsidiaries, including PFC Consulting Limited (100% shareholding), REC Limited (52.63% shareholding), PFC Projects (100% shareholding), and PFC Infra Finance IFSC (100% shareholding). As of FY2024, PFC is the highest profit-making NBFC in India. It established a foreign subsidiary in the IFSC at GIFT City, further solidified by a Rs.100 crore infusion in April 2024. The company’s loan asset book stands at Rs.4,81,462 crore, with a profit after tax (PAT) of Rs.14,367 crore.

(Source: Company Report)

5. Hindustan Copper Limited:

NSE Symbol	Beta	3-Year CAGR Profit	ROCE	P/E Ratio
HINDCOPPER	2.10	38.90%	15.74%	78.13

Hindustan Copper Limited (HCL) was established in 1967 to take over operations from the National Mineral Development Corporation Ltd. It holds the distinction of being India’s first public sector undertaking and the only fully vertically integrated copper producer. HCL manages the entire copper production process, from mining to creating saleable products. In FY2024, HCL posted a net worth of Rs.2,073.63 crore, a net turnover of Rs.1,686.51 crore, and a net profit of Rs.295.41 crore. HCL is the sole public sector company involved in every step of copper production, including mining, beneficiation, smelting, refining, and casting. This integrated approach allows HCL to efficiently deliver quality copper products to the market.

(Source: Company Report)

Factors to Consider When Investing In High-Volatility Stocks:

Investing in high-volatility stocks can offer the chance for significant returns, but it also comes with increased risk. Before diving in, consider a few important factors:

• Risk Tolerance  

High-volatility stocks can see major price swings. Assess your risk tolerance carefully, as these stocks can lead to quick gains or losses that may not suit everyone.

• Investment Timeframe  

These stocks are often better for short-term traders who can capitalize on rapid price movements. If intraday trading interests you, look at the most volatile stocks for immediate opportunities, but be aware of the risks involved.

• Fundamental Analysis  

Examine a company’s financial statements, earnings reports, and debt levels. High volatility can indicate uncertainty, so ensure the company’s fundamentals match your risk appetite.

• Market Conditions  

Stay informed about market volatility and specific events that might affect stock performance. Understanding these factors can help in making informed decisions.

• Diversification  

Instead of focusing on one high-volatility stock, consider spreading your investments across several to manage risk better.

• Risk Management  

Have a clear plan for entry and exit points, and consider setting stop-loss orders to limit losses. A flexible risk management strategy is vital, given the unpredictable nature of these stocks.

• Research and Analysis  

Use tools to analyze historical performance and volatility patterns. Staying informed about current volatile stocks can help identify trading opportunities, but thorough research is essential before making any moves.

Bottomline:

High-volatility stocks can be an appealing option for investors willing to take on significant risks in exchange for the potential for high returns. However, it’s essential to understand how to leverage volatility effectively before making these investments. 

For long-term investors, a good strategy is to remain invested and focus on the bigger picture rather than getting distracted by short-term price fluctuations. At the same time, short-term investors can keep capitalizing on the swings with proper strategies in place. Regardless of your investment style and the types of share market, conducting thorough research is crucial because while high-volatility stocks offer opportunities for significant gains, they also come with risks that require careful consideration and planning.

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