Author: Sagar Goregaonkar
Introduction of Company:
Shoppers Stop is an Indian department store chain, owned by the K Raheja Corp. There are 86 stores across 40 cities in India, with clothing, accessories, handbags, shoes, jewellery, fragrances, cosmetics, health and beauty products, home furnishing, and decor products. Shoppers Stop Ltd has been awarded “the Hall of Fame” and won “the Emerging Market Retailer of the Year Award”, by the World Retail Congress at Barcelona, in April 2008. In June 2018, the retail chain underwent a board rejig in which promoter Chandru L Raheja resigned as the non-executive chairman after having served for over two decades. Chandru Raheja was succeeded by BS Nagesh.
Objective: To calculate the beta of Shoppers Stop Limited and find its significance.
View and Reviews:
• Shoppers Stop shares zoom 20% after September quarter earnings announcement- Zee Business.
• Shares of Shoppers Stop Ltd rose by nearly 8% on Wednesday on NSE, taking the gains so far in 2022 to 17%- Mint.
• Shoppers Stop Limited reported a profit of Rs 77.32 Crores for the third quarter ended December 2021- Economic Times.
Data Collection:
• The data of the company was then regressed with Nifty 50 by using data analysis technique.
• The data of the company and Nifty 50 (index) has been downloaded from nseindia.com.
• The company data is dependent variable (X) whereas the Nifty 50 data is independent variable (Y).
Data Analysis:
Y^= 11961.35+ 16.1697X
Where X= Shoppers Stop Ltd.
In the data, n= 47; R^2= 0.649198; F-stat= 83.27757
The above regression equation tells us the relationship between X and Y, where Y= Shoppers Stop Limited and X= Nifty 50 prices.
The positive sign tells us there is direct relationship between them, if the price rises of Nifty 50 then the price of Shoppers Stop Limited also rises and vice versa.
From the equation, it can be seen if X rises by 1 unit, Y will also rise by 9.125654 units (t-stat)
R^2 is 0.649198 which means 64.9% of Y is explained by X and the balance is error.
F= 83.27757 which is more than the table value, which means overall the model is statistically significant at 5% level.
Conclusion:
Based on the research methodology and data analysis performed we can conclude that only 64.9% of Shoppers Stop Limited can be explained by Nifty 50 and the remaining is attributed to the fundamentals and the policies of Shoppers Stop Limited.
Since F value is greater than the table value, b value is significant. The model can be relied upon to analyse the risk factors and the analysis can depend on this model.