A Study on Risk and Return Analysis of Selected Nifty Companies with Special Reference to Geojit Cochin

Kaye, David is a leading author, lecturer, examiner and workshop leader on Risk Management and business continuity subjects. Professor Kaye guides a diverse range of companies, and public sector organizations on risk related issues around the world. He is an FCII, FBCI, MIRM, FRSA and chartered insurer. Julia Graham is a former Board member of the Business Continuity Institute, the Chartered Insurance Institute and Chair of the British Standards

A holistic view of risks is crucial for business profitability and this can be achieved through a process of frequent evaluation, training, monitoring and feedback sessions with key stakeholders (Chugh, 2016). This approach provides a framework for understanding the patterns and trends of potential risks and how they relate to the industry. A successful business should have efficient procedures, which include management and financial reporting systems. There many examples of organizations which have successfully managed their risks and turned the opportunities into concrete returns for the shareholders.

Risk refers to a likelihood, probability, a chance that a loss may occur in a given organization. Most of the times, there is a high risk when there is vulnerability. In this case, vulnerability refers to a weakness that the organization has. Risk assessment refers to the process of identification of potential hazards and proper analysis of the expected losses if those hazards occur (Homeland Security, n.d.). Risk assessment as a way of profiling risk according to impact to the organization. Some organizations have business impact analysis exercises geared towards determination of potential hazards based risk assessment approaches. Organizations’ risk differ depending on the size and the type of business they are doing. The disparity in organizations’ risk call for different adaptation of risk assessment approaches. Even with the disparities of the businesses, proper risk management not only ranks the risks according to the seriousness but also identifies the best methods to control risks in an organization.

Because of rapid economic growth in XXX over the past years has increased the fear of major business failure, risk has become an overwhelmingly dominant business topic. As a result, top managers are now focusing on risk management in their companies. As each business entity struggles with its own set of needs and circumstances, the need and flexibility to address this continuously changing and volatile economic environment, would be extremely challenging and fulfilling to me.

Risks are probabilities that could render a business to have lower than anticipated profits. This could be due to various and numerous factors. The identification, acknowledgement and acceptance of these risks are fundamental to every business, Coffeeville in particular. This report will outline CoffeeVille’s exisiting Risk Management Policy. It will also determine its effectiveness with regards to risk identification, management and control.

The Business Impact Analysis will generate interest, support, and momentum in the continuity project as a whole and a risk analysis can greatly reduce the cost of insurance, by identifying and quantifying a potential loss, thereby allowing the risk manager to avoid over or underinsuring the risk. A BIA will allow management to make timely decisions about future business issues. This is accomplished by looking at impacts, over time. (p108 J.F. Broder)

Risk Assessment - The risk assessment is the process of evaluating threats to a business, customers and stakeholders. Threats may range from a high probability to a minimal impact to a business. Such as faulty power grid to a high impact such as a cyber-attack to natural disasters. This step is vital in examining how effective a business continuity plan will succeed if subject to a threat scenario. This analysis will provide feedback or refinement to the

Such decisions may affect the company’s profitability today but judging from the fact that high risk means low stock price and vice-versa, high return waits in the future.

Creating new business and innovation always come with elements called risk and unpredictability, which most business people (managers, senior management, etc.) dislike. Therefore it is very important to know how to get an insight into the risk involved and create predictability for generating growth within a company.

First, a clear risk hierarchy was introduced which allowing the right people to manage the right risks. Second, the Quantified Risk Analysis controlled the contingency allocation. Key risks were forecast before they occurred which allow the management team to solve the problems in advance. In addition, sufficient contingency ensured the budget maintained as appropriate. Third, a clear and open reporting system created a healthy balance of review in the whole process. Last, assurance and audit promoted an honest culture of risk

Despite the decline in the use of quantitative risk analysis, it is still important to note that risks still exists and risk management has a valuable function to companies. The question that should pose company officials is, “how can a company make its risk management function become more effectual and

A combination of business risk and financial risk shows the risk of an organization’s future return on equity. Business risk is related to make a firm’s operation without any debt whereas financial risk requires that the firm’s common stockholders make a decision to finance it with debt. Business risk can be evaluated volatility in earnings and profits (coefficient of variation of returns on assets and of operating profits). A measure of business risk is also asset beta or unlevered beta. In case of AHP, it is 1.2 (βa) which is very low signifying low business risk for the firm.

All the decision that the business made is affected and has came into consideration of the key stakeholders and the risk associated with it. The process of risk identification, risk analysis and risk evaluation, or known as risk assessment (Garlick, 2007), in this context has applied the risk management process model AS/NZS 4360:2004. Tools like risk register and radar diagram are also utilized to facilitate the evaluation of business risk culture.

This report also uses some forecasting technique to evaluate the future position of the company. The discount rate (WACC), which incorporates the risk-free rate and risk factor for individual stock, is the key driver of share prices. The sensitivity analysis shows that the theoretical share price is very sensitive to change in WACC. Thus, slightly changes in WACC will lead to a significant impact on the current stock price. The factors that can take the place of WACC such as market return, the company’s beta, risk free rate, and tax rate should be used to observe the fluctuation of stock price which is WACC forecast. This may indicate that ABC value is currently overvalued since the valuation of the share is slightly lower than the actual share price. In addition, although the value of ABC might increase in the future, share price is changed by the movement of WACC. Therefore, it should not hold the shares in the company.

INSTRUCTORS: PROF. S.K. BARUA PROF. J.R. VARMAACADEMIC ASSOCIATE: MS. VAISHALI SATTAREPORT PREPARED BYGROUP 12MEENAKSHI DEOGAM M. SHYAMNIMISHA SAXENARAGHAV YADAVROHAN ANANDDATE OF SUBMISSION: 24TH AUGUST, 2010