Title: Relationship of SBI Cards with Nifty50.
Author: SAMAY M PATEL
Intro: SBI Cards & Payment Services Limited, previously known as SBI Cards & Payment Services Private Limited, is a credit card company and payment provider in India. SBI Card launched in May 1998 by State Bank of India and GE Capital. In December 2017, State Bank of India and The Carlyle Group acquired stake in the company.
Objective: To calculate Beta and its significance.
Views and Reviews: “We believe high credit cost along with the vintage of bad loans is a concern. We downgrade to ‘reduce’, from ‘hold’, even when earnings have bottomed out, as we view risk management as the key valuation driver for unsecured loans,” said Nuvama.
Data collection:
https://www.livemint.com/market/stock-market-news/sbi-card-share-price-falls-4-after-q1-results-brokerages-express-mixed-views-11690777002713.html
https://www.nseindia.com/
Data Analysis:
Equation: Y= -0.5739071+1.185365538 x
Interpretation:
The above equation shows the relation between Nifty50 and SBI Cards.
Return of SBI Cards is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of SBI Cards will also rise by 1.185and vice-versa.
Number of observations are 50.
The p-value for which is 0.00.
R square is 0.27 which means 23% of variances in Bank of Baroda are explained by Nifty.
F is 17.14, p-value for this is 0.00 which means model is statistically significant at 1% level.
Conclusion: Beta is 1.18 which is more than 1, it means that SBI Cards is good for short term investment.
Reference:
https://www.nseindia.com/