Title: Relationship of Saregama India Limited with NIFTY 50
Author: Soumya Gopal Mukhopadhyay
Introduction: Saregama India Limited is a prominent player in the Indian music industry, with a rich heritage dating back to 1897. The company has been a pioneer in the recording and distribution of music, offering a diverse range of musical content to audiences worldwide. Its stock price has been influenced by various factors, including the overall performance of the Indian music industry, the company’s financial health, and the popularity of its artists and music releases. The company’s stock has generally shown a correlation with the broader Indian stock market, with periods of growth and decline reflecting economic trends and investor sentiment.
Objective: To find out Beta of Saregama India Limited and its significance.
Data Collection: The data of NIFTY 50 and Saregama India Limited from 01.05.23 to 30.04.24 was downloaded from NSEindia. Data was manipulated to find the Friday closing prices. Weekly returns of NIFTY 50 and Saregama India Ltd were calculated. Weekly returns of NIFTY 50 were X and that of Saregama India Ltd were Y. Then Y was regressed upon X.
Data Analysis: 91.59+0.008
(2.55)
N= 46, R square= 0.13, F= 6.53, P Value= 0.14
Interpretation: The above equation depicts the relationship between weekly returns of Saregama India Ltd and weekly returns of NIFTY 50. The plus sign before the coefficient of NIFTY 50 tells that if NIFTY 50 rises, Saregama India Ltd will also rise and vice versa. The figure in the bracket is tstat for Beta. If NIFTY 50 rises by 1 unit, Saregama India Ltd will rise by 0.008 unit. The figure in the bracket is the tstat for Beta. The P value of which is 0.14, which is less than 0.5. Hence, this means that Beta is statistically significant.
R square is 0.13, meaning 13% of the company’s returns are explained by NIFTY 50. The balance 87% may be due to fundamentals. F is 6.53 and P value is 0.14 meaning overall model is statistically significant.
Conclusion: Beta is 0.008, which is less than 1, so investment in Saregama India Ltd can be done for long term.