INTRODUCTION:
DLF Ltd is one of India’s largest real estate development companies with a strong presence in residential, commercial, and retail real estate segments. The company has played a significant role in shaping urban infrastructure across major Indian cities. Being a real estate firm, its stock performance is influenced by macroeconomic conditions, interest rates, and overall market movements. Studying its relationship with the Nifty 50 helps in understanding the market risk associated with DLF Ltd.
Objective:
– To calculate the beta of DLF Ltd
– To observe the significance of beta with respect to Nifty 50 returns
Literature Review:
– Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. Journal of Finance, 19(3), 425–442.
– Fama, E. F., & French, K. R. (2004). The capital asset pricing model: Theory and evidence. Journal of Economic Perspectives, 18(3), 25–46.
Data Collection:
Data for DLF Ltd and Nifty 50 were collected from the official website of the National Stock Exchange of India (NSE) for the period from 1st December 2024 to 30th November 2025. Friday closing prices were identified from daily price data. Weekly returns of Nifty 50 and DLF Ltd were calculated. Weekly returns of Nifty 50 were taken as the independent variable (X) and weekly returns of DLF Ltd were taken as the dependent variable (Y). Regression analysis was carried out by regressing Y on X.
Data Analysis:
Y = 0.534 + 0.424X
N = 48, R² = 0.025, F = 1.192, p-value = 0.281
– The above equation shows the relationship between the weekly returns of DLF Ltd and the weekly returns of the Nifty 50 index. The beta value of 0.424 indicates a positive but weak relationship between the company’s returns and market returns. This implies that if the Nifty 50 return increases by 1 unit, the weekly return of DLF Ltd increases by 0.424 units, indicating that the stock is less volatile than the market.
– The p-value of 0.281 is greater than 0.05, which indicates that the beta coefficient is not statistically significant at the 5% level of significance. The number of observations (N = 48) represents the total number of weekly trading observations considered in the analysis.
– The R² value of 0.025 indicates that only 2.5% of the variation in the weekly returns of DLF Ltd is explained by movements in the Nifty 50, while the remaining 97.5% variation is due to firm-specific and other external factors not included in the model. The F-statistic value of 1.192 with a p-value of 0.281, which is greater than 0.05, indicates that the overall regression model is not statistically significant.
Conclusion:
Since the beta value of DLF Ltd is less than 1, the stock is less volatile than the market. Therefore, DLF Ltd is suitable for long-term investment when the Nifty 50 is expected to rise, as it shows relatively stable returns compared to market movements.
References:
– National Stock Exchange of India. (2025). Historical market data.
– Sharpe, W. F. (1964).
– Fama, E. F., & French, K. R. (2004).