RELATIONSHIP BETWEEN ROYAL ORCHIDS HOTEL LTD.

TITLE: RELATIONSHIP BETWEEN ROYAL ORCHIDS HOTEL LTD.

 

• AUTHOR: RAHUL VIJAY SHIRKE

 

• INTRODUCTION: ROYAL ORCHID HOTELS is a renowned Indian hotel chain known for its luxurious accommodations and exceptional service. With a presence across India, Sri Lanka, and Nepal, the chain offers a wide range of properties, from budget-friendly options to upscale resorts. Their commitment to quality and guest satisfaction has made them a popular choice for both leisure and business travellers.

 

• OBJECIVE: TO FIND OUT BETA AND SIGNIFICANCE OF ROYAL ORCHIDS HOTEL LTD.

 

• DATA COLLECTION: Data was collected from NSE site for the period of 1/5/23 to 30/4/2024. Data was manipulated to find the Friday closing price. Weekly returns of NIFTY50 and ROYAL ORCHIDS HOTEL were calculated. Weekly return of ROYAL ORCHIDS HOTEL if Y and weekly returns of NIFTY50 is X. Weekly return of ROYAL ORCHIDS was regressed on weekly returns of NIFTY50.

 

• DATA ANALYSIS:

Weekly return of Royal Orchids Hotel = 0 .85 + 2.23(weekly return of NIFTY50)

                                                     (3.60 T STAT)

N=49, R²=0.22, F=12.95, P VALUE=0.00077

 

• INTERPRETATION: The above equation shows the relationship between Weekly Return of ROYAL ORCHIDS HOTEL and Weekly return of NIFTY 50. The plus sign before the coefficient of NIFTY50 tells that if NIFTY rises your company will also rise and vice versa.

 

3.60 is the TSTAT for the Beta and the P value for which is 0.00077 which is less than 0.05 meaning Beta is statistically significant @ 5% level.

 

R² is 0.22 meaning 22% of companies return are explained by NIFTY50 the balance 68% maybe due to fundamentals.

 

F is 12.95 and the P value is 0.00077 meaning the overall model is statistically significant.

 

• CONCLUSION: Since Beta is 2.23 which is more than 1, this is good for short term investment,