Title: Relationship of Shoppers Stop Limited with Nifty50
Author: Shubham Deepak Agavane
Introduction: Shoppers Stop Limited, founded in 1991, is a prominent retail chain in India that began as a single store in Mumbai. Over the years, it has significantly expanded, establishing multiple locations across the country and offering a diverse range of products including apparel, cosmetics, and home goods. In 1997, the company became a public limited entity, enabling further capital acquisition for expansion. In 2017, the company shifted towards a technology-driven retail experience, focusing on integrating online and offline sales channels. The COVID-19 pandemic in 2020 accelerated its emphasis on e-commerce, allowing it to adapt to changing consumer behaviors. The company has consistently reported steady revenue growth, driven by store expansions and increased brand partnerships, reflecting its resilience and adaptability in the retail sector.
Objective: To find out Beta of Shoppers Stop Limited and its significance
Data collection: Data for Nifty50 and Shoppers Stop Limited was downloaded from NSE website, further period 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated by the formula (Yt-1 – Yt)/Yt*100. Weekly returns of Shoppers Stop Limited were regressed on weekly returns on Nifty50.
Data Analysis: Weekly return of Shoppers Stop Limited = 0.12 + 0.89
N = 46, R2 = 0.1248, t-stat = 2.4767, F = 6.1341, P-value = 0.0172
The above equation shows the relationship between Nifty50 and Shoppers Stop Limited. The positive sign before 0.89 means, if Nifty rises Shoppers Stop Limited will also rises and vice versa. The coefficient of Nifty50 has t-stats = 2.4767 and the P value of which is 0.0172, meaning Nifty50 is statistically significant. To increase the prices of Shoppers Stop Limited, R2 is 0.1248 meaning 12.48% of Shoppers Stop Limited prices are explained by Nifty50. 99.9% dependents upon other factors like fundamentals are others factors. F is 6.1341 and the P value of this is 0.0172 meaning it is less than 0.05, meaning the overall model is statically significant.
Conclusion: 0.89 is less than 1 but positive, Shoppers Stop Limited is good for long term investment.