Relationship of Shemaroo Entertainment Limited with Nifty50
Author: Shraddha Surve
Introduction:
Shemaroo Entertainment Limited, established in 1962 by Buddhichand Maroo, is a prominent Indian media and entertainment company headquartered in Mumbai. Initially starting as a book-circulating library, Shemaroo has evolved into a leading content creator, aggregator, and distributor with a diverse library of over 3,700 titles across various Indian languages. The company offers a wide range of content, including movies, TV shows, comedy, devotional, film music, regional content, and children’s entertainment. In 2019, Shemaroo launched its own video-on-demand platform, ShemarooMe, providing audiences with access to its extensive content library. Additionally, Shemaroo distributes content to satellite, cable, and terrestrial networks and offers services such as in-flight entertainment solutions. The company’s ability to sense audience preferences has enabled it to become a trusted partner to major media platforms like YouTube, Netflix, Hotstar, and various telecom operators.
Objective:
To find out the Beta of Shemaroo Entertainment Limited and its significance
Literature Review:
India’s Media & Entertainment Industry: Growth, Trends, and Business Innovation
(Dr. Rashmi and Dr. Shalini ,2020) reported the Indian Media and Entertainment (M&E) industry is experiencing rapid growth, with a CAGR of 11.6%, surpassing the country’s GDP growth. Factors such as digital infrastructure expansion, shifting consumer preferences, and the rise of non-linear content consumption have fueled this transformation. The sector, contributing 2.8% to India’s GDP, is driven by increased internet penetration, digital literacy, and government initiatives like FDI relaxation and single-window clearance for film production.Key trends include the surge of Over-the-Top (OTT) platforms, a shift from traditional TV to digital streaming, and an increasing reliance on big data and AI for content personalization. The study highlights emerging business models, such as Telecom-Media-Tech (TMT) ecosystems, subscription-based content, and innovations in augmented reality (AR) and virtual reality (VR). However, challenges such as piracy, regulatory disruptions, and consumer subscription fatigue remain. The future of India’s M&E industry will depend on how companies adapt to technological advancements and evolving consumer demands.
Investment Value Analysis in the Media & Entertainment Industry: A Comparative Study
(Huang and Yan, 2024) reported analyses the investment value of four major players in the Media & Entertainment (M&E) industry—Paramount Global, Netflix, Fox Corporation, and The Walt Disney Company—using value investing principles. The study evaluates key financial indicators such as earnings per share (EPS), price-to-earnings (P/E) ratios, revenue growth, and profitability trends. The analysis identifies Netflix as the most promising investment due to its high revenue growth rate, strong EPS projections, and stable profitability, despite facing risks like intense competition, high valuation volatility, and cybersecurity threats. While other companies exhibit strengths in certain areas, Netflix’s market dominance in streaming and continued innovation make it the most attractive option for investors seeking long-term value. However, the study acknowledges its limitations, such as reliance on historical data and lack of qualitative assessments like brand strength.
Data Collection:
Shemaroo Entertainment Limited and Nifty50 data was downloaded from NSE India website for period from 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices. Where weekly returns of NIFTY 50 will be Y & Weekly returns of Shemaroo Entertainment Limited will be X, Y regression on X.
Data Analysis:
Equation: Shemaroo Entertainment LTD = 0.053 + 1.293 Nifty50
Interpretation: The regression analysis indicates a weak relationship between X Variable 1 and the dependent variable, as shown by the R-Square value of 0.0883 (8.83%), meaning only 8.83% of the variance in the dependent variable is explained by X Variable 1. However, X Variable 1 has a statistically significant impact (p-value = 0.0425), suggesting it has a meaningful effect at the 5% significance level. The coefficient of 1.2933 implies that for every unit increase in X Variable 1, the dependent variable increases by 1.2933 units on average. The intercept is not statistically significant (p-value = 0.9587), meaning it has no meaningful contribution to the model. The ANOVA F-test (p = 0.0425) suggests that the model as a whole is significant but weak. Overall, while X Variable 1 is significant, the model has low explanatory power, indicating other factors may influence the dependent variable.
Conclusion:
The beta coefficient (1.2933) indicates that for every 1-unit increase in X Variable 1, the dependent variable increases by 1.2933 units, and since the p-value (0.0425) is less than 0.05, this effect is statistically significant.
References:
Aggarwal, Rashmi Dr and Rahul-Tiwari, Shalini, Macro-Economic Landscape of Media & Entertainment Industry in India: Emerging Business Models (January 21, 2020). Available at SSRN: https://ssrn.com/abstract=3523192 or http://dx.doi.org/10.2139/ssrn.3523192
Huang, Youran & Yan, Jiaying. (2024). Comparative Analysis of Investment Value in the Media and Entertainment Industry. Advances in Economics, Management and Political Sciences. 98. None-None. 10.54254/2754-1169/98/2024OX0123