Title: Relationship of DLF with Nifty50.
Author: Devang Khandalekar
Intro: DLF was founded in 1946 by Chaudhary Raghvendra Singh, DLF started with the creation of 22 urban colonies in Delhi. In 1985, the company expanded into the then-unknown region of Gurugram, creating exceptional living and working spaces for the new Indian global professionals. Today, DLF is the largest publicly listed real estate company in India, with residential, commercial, and retail properties in 15 states and 24 cities.
Objective: To calculate Beta and its significance.
Views and Reviews: Relatively high exposure to the luxury residential segment has worked in favour of DLF Ltd in recent quarters. Sales momentum has largely sustained for DLF so far, despite the ongoing interest rate hikes and, consequently, rising home loan rates. But sales here are driven mostly by non-resident Indians (NRIs) and high net-worth individuals, who have shown resilience to rate hikes. Morgan Stanley continued to remain overweight on DLF.
Data collection: Nifty and DLF’s closing price was collected from NSE website. The weekly return of Nifty is termed as “X” and weekly return of DLF is termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y=1.1041+0.82946x
Interpretation:
The above equation shows the relation between Nifty50 and DLF.
Return of DLF is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of DLF will also rise by 0.0833 and vice-versa.
Number of observations are 49.
-1.835 is the t-stat for Y, the p-value for which is 0.044.
R square is 0.0833 which means 8% of variances in DLF are explained by Nifty.
F is 4.2752, p-value for this is 0.044 which means model is statistically significant at 1% level.
Conclusion: Beta is -1.1041, which is less than 1, it means that DLF is good for long term investment.
Reference:
www.nseindia.com/reports-indices-historical-index-data
www.nseindia.com/get-quotes/equity?symbol=DLF
https://www.proquest.com/docview/2747590711/2170D1089E5746B1PQ/3?sourcetype=Newspapers