Title : Relationship of Nifty50 with Just dial Ltd.
● Author: Janhavi Raut
● Introduction : Justdial Ltd. is a leading Indian internet technology company providing local search and digital marketing services. Founded in 1996 by V.S.S. Mani, it is headquartered in Mumbai and operates across multiple cities in India. The platform helps users find businesses, services, and products via its website, mobile app, and customer helpline. In 2021, RelianceRetail Ventures Ltd. acquired a 66.95% stake in Justdial, making it a subsidiary of Reliance Industries Ltd. The company continues to innovate with AI-driven search, digital payments, and business solutions. With over 13,000 employees, Justdial plays a key role in India’s digital transformation.
● Objective : To find of Beta of Just dial Ltd.
● Literature Review :
1. Stock Market & Beta Relationship: Beta (β) is a key financial metric used to measure a stock’s volatility relative to the overall market. Research suggests that high-beta stocks move more aggressively with the market, while low-beta stocks are more stable. The NIFTY50 index, representing India’s top companies, serves as a benchmark for evaluating stock performance, and beta estimation helps investors assess systematic risk and potentialreturns.
2. Justdial Ltd. & Market Sensitivity: As a technology-driven company, Justdial Ltd.’s stock may exhibit varying correlation with NIFTY50 due to industry trends and market sentiment. Previous studies indicate that firms in dynamic sectors often experience fluctuating beta values. This study aims to calculate Justdial’s beta using historical stock price data and regression analysis with NIFTY50 returns to determine its risk exposure and market sensitivity.
● Data Collection : Data for Just dial Limited and Nifty 50 was downloaded for the period from 1st January 2024 to 31st December 2024. The data was manipulated to calculate the Friday closing prices for both indices. The Nifty 50 was represented as X and Just dial Limited as Y. A linear regression analysis was performed where Y was regressed on X.
● Data Analysis :
The regression equation: Y= 0.005 + 0.683X describes the relationship between the Nifty 50 (X) and the Just dial share price variable (Y) indicating that Just dial share price is the dependent variable .The positive coefficient of 0.683 suggests that for every unit increase in Nifty50 , Just dial share price is expected to increase by 0.683 units. With 47 observations (N = 47), the model’s R-squared value is 0.0266, indicating that only 2.66% of the variation in Just dial share price can be explained by changes in Nifty50, while the remaining 97.34% is due to other factors. The p-value for the slope is 0.2732, which is greater than 0.05, indicating that the relationship between X and Yis not statistically significant at the 5% level. Consequently, this model does not provide strong evidence of a significant linear relationship between Nifty50 and Just dial share price.
● Conclusion :
If beta is greater than 1, the stock is more volatile and may be suitable for short-term investment.
If beta is less than 1, the stock is less volatile and may be better for long-term investment.
In this case, Just dial Ltd.’s beta of 0.68 indicates that it is less volatile than the market and better suitable for long-term investment.
● Reference :
1. Mishra, A. K., & Sehgal, S. (2010). Theoretical and Empirical Consideration of Beta as a
Measure of Risk: Evidence from Indian Equity Market. Asian Journal of Finance&
Accounting, 2(1), 60-74.
2. NSE India. (n.d.). NIFTY 50 Index. Retrieved from https://www.nseindia.com