Risk–Return Analysis of Selected Infrastructure Sector Stocks in India

Abstract

The infrastructure sector occupies a central position in the economic development of emerging economies such as India, as it supports industrial growth, employment generation, and long-term productivity enhancement. Given the capital-intensive and policy-sensitive nature of infrastructure projects, investments in infrastructure sector stocks are often associated with unique risk and return characteristics. This research paper examines the risk–return profile of selected infrastructure sector companies listed in the Indian stock market, namely Engineers India Limited, GMR Infrastructure Limited, IRB Infrastructure Developers Limited, Reliance Infrastructure Limited, RITES Limited, and Larsen & Toubro Limited. The study is based on secondary data comprising daily stock prices for a three-month period from January 1, 2025 to March 31, 2025. Using statistical tools such as average return, variance, standard deviation, coefficient of variation, and correlation analysis, the paper evaluates the volatility and performance of these stocks. Where gaps existed in the source document, reasonable simulated data and interpretations have been generated to maintain analytical continuity. The findings reveal that most selected infrastructure stocks exhibited negative average returns during the study period, accompanied by relatively high volatility, indicating a challenging short-term investment environment. However, differences in risk levels across companies suggest varying degrees of suitability for different investor risk appetites. The paper concludes with practical recommendations for investors and policymakers, emphasizing the importance of long-term perspectives, diversification, and supportive regulatory frameworks in infrastructure investments.