-
CAUSAL RELATIONSHIP OF KPI WITH STOCK MARKET RETURNS WITH REFERENCE TO NSE INDIA
G. Eranna Prof. H. Lajipathi Rai
Abstract:
The present study focused to know the causal relationship of KPIs with the Stock Market returns of Index based stocks. The study considered the secondary data from National stock exchange India and applied the Johensen Co-integration test and Granger Causality Test. The study considered the few KPIs as independent variables and stock returns as dependent variable. The study concluded that it examined the causal relationship between key performance indicator (KPI) ratios and the financial performance of Nifty high market capital companies in India. The findings indicate that certain KPI ratios, namely PE, PBDITA, EPS, ROA, CR, and DER, have a Granger causal relationship with financial performance, while NPM, DPS, and ROE do not. Additionally, the results of the Johansen co-integration test suggest that the KPI ratios and financial performance are integrated with each other. Overall, the study provides valuable insights into the relationship between KPI ratios and the financial performance of Nifty high market capital companies and highlights the importance of considering these ratios in investment decision-making.