Title: Relation of Nifty 50 with Persistent Systems Limited
Author: Priya Jadhav (13)
Introduction:
Persistent Systems Limited is one of India’s leading IT services companies focused on software development, digital transformation, and technology consulting. It provides end-to-end services including cloud computing, data analytics, and enterprise solutions to clients across various industries. This study examines the relationship between the performance of the Nifty 50 index and the stock returns of Persistent Systems Limited. The objective is to analyze how movements in the overall market influence the returns of Persistent Systems Limited.
Objective: Calculation of Beta and observe it’s significance
Literature review:
Murthy (2008) analyzed stock market integration in India and found that overall market movements play a significant role in influencing investment decisions and stock returns. This supports the idea that movements in the Nifty 50 can impact the stock performance of Persistent Systems Limited.
Gupta and Basu (2011) examined stock market volatility and returns in India and concluded that market fluctuations have a direct effect on individual stock returns. Their findings indicate that volatility in the broader market significantly influences companies like Persistent Systems Limited.
Data collection:
Data for Nifty 50 and Standard Industries Limited was downloaded by www.nseindia.com for the period 24/03/2025 to 31/12/2025 Friday closing price for Nifty 50 and Standard Industries Limited were calculated. Weekly returns of Nifty 50 were taken as X and Weekly return of Standard Industries Limited were taken as Y. Y was regressed on X.
Data Analysis:
Y = 0.0377 + 0.1998X
N = 190 R Square = 0.3227 F = 89.57
P = 1.25576E-17 B = 0.1998 T-Stat = 9.4642
The above Equation shows the relationship between Nifty 50 and Suzlon Energy Ltd. Positive means their Direct relation which means if Nifty 50 stock rises Suzlon Energy Ltd stock rise and vice versa. If Nifty 50 stock increases by 1 unit, the Suzlon Energy Ltd stock increases by 0.1998 unit. Number of observations is 190. T-stat for beta is 9.4642. The P value is 1.25576E-17 less than 0.05 meaning Beta is statistically significant at 5% level. R square is 0.3227 meaning 32.27% is explained by market return and 67.73% is error due to the variability not included in model. F is 89.57 and P value is 1.25576E-17 less than 0.05 meaning Beta is statistically significant at 5% level.
Conclusion:
B < 1, Hence invest for long term as stock is less responsive to Nifty 50 movements.
Reference:
Murthy, K. V. B. (2008). Stock market integration and investment decisions in India. The IUP Journal of Applied Finance, 14(4), 5–20.
Gupta, R., & Basu, A. (2011). Stock market volatility and return: Evidence from India. Global Business Review, 12(1), 67–81.