Title: Relationship of PVR INOX Ltd with Nifty 50.
Author: Pratiksha shete
Introduction: PVR INOX stands as India’s largest and most luxurious film exhibitor, boasting 1713 screens across 113 cities with 361 properties and a seating capacity of 3.57 lakh seats. Through strategic investments and acquisitions, including Cinemax Cinemas, DT Cinemas, and SPI Cinemas, we’ve expanded our footprint and elevated the movie going experience. Our recent merger with INOX Leisure Limited marks another milestone, reinforcing our 25-year legacy of transforming the entertainment landscape and setting new standards in the industry. Join us for an unparalleled cinematic journey, redefining the way you experience movies.
Objective: To calculate Beta and find its significance
Data collection: Data for Nifty 50 and PVR INOX was downloaded from NSE site for the period 01-03-2023 to 28-02-2024. Friday closing price were calculated and weekly returns were found out. Weekly returns of PVR INOX were regressed on weekly returns Nifty 50.
Data analysis: PVR INOX returns = -0.6032 + 0.6731 Nifty 50 returns
t-stat = (1.8592)
n= 47
R2= 0.07134
F= 3.4567
P value= 0.2346
Interpretation: The above equation shows the relationship between Nifty 50 and PVR INOX Negative sign means inverse relationship. If the returns of Nifty 50 increases, the returns of PVR INOX falls and vice versa. This equation indicates that for every 1-unit increase in the returns of the Nifty 50 index, the returns of PVR INOX are expected to fall by 0.6731 units and vice versa. T- stat for PVR INOX is given in bracket and P- value for this is 0.2346 which is more than 0.05, meaning Nifty 50 is not statistically significant at 5% level meaning Nifty 50 return does not play a significant role for PVR INOX. Number of observations are 47. R2 is 0.07134 meaning 7% of PVR INOX returns is explained by Nifty 50 returns. Balance 93% is error due to the variable not taken in the model. F value is 3.4567, P value for Nifty 50 is 0.2346 which is more than 0.05. So, the overall model is not statistically significant.
Conclusion: As Beta is 0.6731 which is less than 1, so PVR INOX is good for long term investment.