Title: Relationship between Nifty 50 and Saregama India Limited
Author: Shashank Kamble(76)
Introduction:
Saregama India Ltd is one of India’s oldest and leading entertainment companies, primarily engaged in music publishing, film production, and digital content distribution. With the rapid growth of digital platforms, the company has gained renewed importance in the Indian media and entertainment sector.
This report analyzes the stock performance of Saregama India Ltd and its sensitivity to movements in the broader market index, the Nifty 50.
Objective:
to calculate the Beta (beta) of Saregama India Ltd and observe its significance.
Literature Review:
1.Investment Behaviour in Dynamic Sectors
Bodie, Kane & Marcus (2014): According to their work on investments, stocks in emerging sectors such as media and entertainment may exhibit varying risk-return patterns due to rapid technological changes and evolving consumer preferences.
2. Growth of Media & Entertainment Industry
KPMG (2023): Reports on the Indian media and entertainment industry indicate strong growth driven by digitalization, OTT platforms, and music streaming services, which directly impact companies like Saregama India Ltd and influence their stock performance.
Data Collection:
Data for Nifty 50 and PB Fintech was downloaded from nseindia.com.Period: 1-Jan-25 to 31-Dec-25.Data was manipulated to get Friday closing prices of nifty-50 and Saregama India Ltd.Weekly returns of nifty-50 X named as X and weekly return of company as named as Y.Y was regressed on X.
Data Analysis:
y= -1.01 + 0.98x
|
N |
48 |
|
|
R square |
0.13 |
|
|
F |
7.13 |
|
|
P- value |
0.01 |
|
|
t Stat |
2.67 |
|
|
B |
0.98 |
|
The above equation shows the relationship between Nifty 50 and Saregama India Ltd. The positive coefficient indicates a direct relationship, meaning if Nifty 50 increases, Saregama India Ltd also tends to increase and vice versa.
If Nifty 50 increases by 1 unit, the Saregama India Ltd stock increases by 0.98 units.
The number of observations is 48. The t-stat for beta is 2.67 and the p-value is 0.01, which is less than 0.05, meaning beta is statistically significant at the 5% level.
The R-square is 0.13, which means 13% of the variation in Saregama stock returns is explained by Nifty 50, while the remaining variation is due to other factors not included in the model.
The F-statistic is 7.13 with a p-value of 0.01, which is less than 0.05, indicating that the overall model is statistically significant.
Conclusion:
Beta is slightly less than 1 (0.98), Invest in this company for long term.
Reference:
1. Bodie, Z., Kane, A., & Marcus, A. J. (2014). Investments. McGraw-Hill Education. Investments textbook reference (Bodie, Kane & Marcus)
2. KPMG. (2023). India Media and Entertainment Report
KPMG Media & Entertainment industry insights (India context)