TITLE: Relationship of Zomato Ltd. with NIFTY 50
AUTHOR: Zeeshan Shaikh
INTRODUCTION: This project is about whether Zomato Ltd. is good for short term or long term investments, in comparison with NIFTY 50. Zomato is an Indian multinational restaurant aggregator and food delivery company. It was founded by Deepinder Goyal and Pankaj Chaddah in 2008 & NIFTY 50 represents the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange.
OBJECTIVE: To calculate beta and find its significance.
DATA COLLECTION: Data for NIFTY 50 and Zomato Ltd was downloaded from NSE website for the period 1-3-23 to 28-2-24. Friday closing prices were calculated and weekly returns of Zomato Ltd. were regressed on weekly returns of NIFTY 50.
DATA ANALYSIS:
Equation : Zomato ltd =1.927+1.122 NIFTY 50
n= 48; R2=0.0865; F = 4.360; P value = 0.0423 t-stats for b = 2.088
The above equation shows the relationship between NIFTY 50 and Zomato Ltd. Positive sign means direct relationship, if NIFTY 50 rises Zomato Ltd will also rise and vice versa. If NIFTY 50 rises by 1 unit then Zomato Ldt will rise by 0.28 units and vice versa. T- stats for b is 2.088 given in bracket and the p value for which is given as 0.0423, which is less than 0.05 meaning b is statistically significant at 5% level meaning NIFTY 50 plays a significant role for Zomato Ldt. Number of observations are 48, R2 is 0.0865 is 8.6% of Zomato Ldt is explained by NIFTY 50, balance 91.14% is error due to the variables not taken in the model. F is 4.360 the p value for which is 0.0423 which is less than 0.05, so overall the model is statistically significant.
CONCLUSION: Beta is 1.122 which is more than 1 therefore zomato is good for short term investment.