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Weekend Read: Stock SIP in which IT bellwether stock would have given the best returns?

Yogesh Supekar

Whether Stock SIP is better or a mutual fund SIP is totally different subject that needs detailed consideration.

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Weekend Read: Stock SIP in which IT bellwether stock would have given the best returns?

Recently it is seen that lot of the stock brokers are promoting stock SIPs as a mode to beat market returns and is often touted to outperform even some of  the top performing mutual fund schemes.

Whether Stock SIP is better or a mutual fund SIP is a totally different subject that needs detailed consideration. Here we will check stock SIP in which IT bellwether stock would have generated superior returns over past five years.

From the data available it looks like a stock SIP in Wipro would have fetched the best growth in both lump sum option and in SIP route as well. However, the calculations do not include the dividends paid. So one has to factor those additional returns while choosing for equity SIP.

What is interesting to note in the table below is that the lump sum returns for HCL Technology is little more than that of TCS and Infosys both – however the SIP returns are superior for Infosys and TCS. The CAGR is the best for Wipro at 21 per cent while it is same for HCL Tech, Infosys and TCS for the past five years at about 20 per cent per anum. Tech Mahindra has recorded the lowest CAGR at 14 per cent for past five years.

Clearly the annualised returns are higher when one adopts a stock SIP approach rather than a lump sum approach in IT belwether stocks- historically speaking.

Following table highlights Stock SIP Performance for IT bellwether stocks Vs. Lump sum Investments for the same stocks:-

Sr. No Stock Annualised SIP returns Rs 10,000 monthly SIP worth today is Lump sum returns over 5 Yrs (%) Lump sum 6 Lac invested today would be  Div Yield (%)
1 Wipro 34.98 14,09,929 166                  15,93,469.20 0.36
2 Infosys  34.22 13,85,366 155                  15,29,427.60 1.9
3 TCS 26.73 11,60,682.57 153.89                15,20,310.60 1.15
4 HCL Technologies  26.29 11,48,620.19 158.8                15,52,822.20 2.67
5 Tech Mahindra 22.9 10,58,954.42 100                12,00,224.40 4.2
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