The Comparative Analysis of Large-Cap Equity Stocks of It Sector in India
Abstract
The primary aim of this research is to conduct a comprehensive financial performance analysis of large-cap equity stocks within the IT sector. Descriptive research methods are employed to depict the financial landscape of large-cap IT stocks. The study targets leading IT firms listed on Indian stock exchanges, specifically those with a market capitalization of more than ₹20,000 crore. The sample comprises the top 5 large-cap IT companies selected through a comparative balance sheet analysis. Data analysis is conducted primarily using MS Excel, with Ratio Analysis including Sharpe Ratio, Treynor Ratio, Beta Ratio, Alpha Ratio, and Liquidity Ratios. The Key Findings are Sharpe Ratio Analysis: HCL Technologies demonstrates the best risk-adjusted performance, followed by Larsen & Toubro and Tata Consultancy Services. Treynor Ratio Analysis: HCL Technologies shows the highest Treynor Ratio, reflecting strong returns relative to its market risk. Beta Ratio Analysis: Larsen & Toubro records the highest beta value, suggesting greater volatility in comparison to the overall market. Jensen's Alpha Ratio Analysis: HCL Technologies and LTI exhibit the highest alphas, indicating outperformance relative to market risk. Liquidity Ratio Analysis: LTI Mindtree consistently maintains healthy liquidity ratios, while Infosys shows a declining trend. The analysis of the Alpha Ratio indicates that both HCL Technologies and LTI Mindtree have delivered returns that surpass expected market benchmarks, reflecting strong risk-adjusted performance. Furthermore, the evaluation of liquidity ratios highlights that LTI Mindtree consistently upholds robust liquidity levels, whereas Infosys exhibits a downward trend in liquidity, potentially affecting its ability to meet short-term financial obligations. In conclusion, this research provides meaningful insights into the financial health and resilience of top IT companies in India, offering valuable guidance to investors. The results also highlight the critical need for maintaining a balance between risk and return, along with sufficient liquidity, to ensure long-term financial viability in the IT sector.
References
Nithin Goud K, Ramanjaneyulu YV, Sathya Babu K, Patra BK. User preference multi-criteria recommendations using neural collaborative filtering methods. InProceedings of the Sixth International Conference on Mathematics and Computing: ICMC 2020 2020 Dec 11 (pp. 55-64). Singapore: Springer Singapore.
Rajkar A, Kumaria A, Raut A, Kulkarni N. Stock market price prediction and analysis. Int J Eng Res Technol. 2021 Jun;10(06):115-9.
Kumar N, Kalyan DN. Performance Evaluation of Selected Equity Shares in It Industry, India. India (June 21, 2019). 2019 Jun 21.
Gadhavi MY. Comparative Analysis of Mid & Small-cap Funds Vs Large Cap Funds–A study of top-rated fund of India. Research Review International Journal of Multidisciplinary. 2015;3(5):274-82.
Mathur P. Comparative Analysis of performance of mutual funds: a study of prominent multi cap and large cap funds. Contemporary Issues And Recent Advances In Management, Commerce, Economics. 2021;23.
Dalvadi YM, Shah S. Performance of Large Cap Share and Small Cap Share: A Comparative Study of Selected Companies’ Shares. Indian Journal of Commerce and Management Studies. 2011 Mar 31;2(2):115-28.
Rai RS, Raman TV, Shreekant G. Comparing Returns Between ‘Large’and ‘Mid & Small’Cap Equity Mutual Funds in India. Indian Journal of Applied Research. 2014;4(12):324-8.
Mistry J, Khatwani RA. Examining the superiority of the Sharpe single-index model of portfolio selection: A study of the Indian mid-cap sector. Humanities and Social Sciences Communications. 2023 Apr 26;10(1):1-9.
CMalsawmtluangi K. Revisiting the Determinants of Profitability Among Top Large-Cap Companies in India. IUP Journal of Accounting Research & Audit Practices. 2025 Apr 1;24(2):143-55.
Jagannarayan N, Jayachitra TA. Analysis of large, medium & small capitalization indices: Evidence from Bombay Stock Exchange. The Journal Of Oriental Research Madras, July. 2021:176-81.
