How Profitable Is the Indian Stock Market?


Although the mere size and recent growth of the Indian equity market has attracted much academic research testing the market efficiency, little has been documented on whether investment in Indian stocks is meaningful for investors. The Indian stock market seems to be characterized by significant profitability, but it varies among different sectors in the economy.

What’s Inside?

The authors attempt to answer two questions that remain rather unexplored in the finance literature in regard to the historical performance of the Indian stock market: Have Indian stocks offered a profitable investment opportunity for equity investors in the last decade, and if so, are these profits equally distributed among different sectors of the economy? They find that the Indian market earns persistent profits but the levels are not uniform among the critical sectors of the economy. The highest returns are delivered by the informational technology (IT) sector and the lowest returns by the pharmaceuticals (pharma) sector.

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Biharilal Deora, CFA,


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