Factors Influencing Stock Price of Manufacturing Sector: An Empirical Analysis of NSE listed Companies

Abstract

Anticipating the prices of stocks has been a focal issue both in monetary and academic studies.  Thispaper aims to learning the empirical nexus between equity shares price of manufacturing segment companieslisted with Stock Exchange (NSE) and eleven explanatory variables viz., earning per share (EPS),age of the firm, net profit margin (NPM%), size ( logarithm  Sales & total assets), firm risk measured through price to book value  ratio (P/B),dividend yield percentage (DY%),price earnings ratio, growth (percentage change  in sales & total Assets),dividend per share (DPS) and earning volatility (EV) respectively  for the period between 2008 and 2017. Through multiple regressions, significance of various factorsaffecting stock prices will be determined.  The study reveals that dividend yield,earning per share, dividend per share, price earning ratio and price to book value ratio have significant effect on the market price of share. The four variables such as dividend per share, price to book value ratio, earning per share and PE ratio have significant positive influence on  price of sharesof NSE listed manufacturing sector companies whereas only one factor i.e. dividend yield has  negatively related with stock prices of selected NSE listed companies. This study will help investors to take into consideration significant factors while investing in the manufacturing sector companies and they will also be able to forecast future stock prices by using model equation of significant variables. This study will also useful for management of company in framing policies and its effect on share price of the company.

 Keywords: Price of Share ,Stepwise regression, Dividend per share,Earning volatility ,Earning per share, Price to Book Value (P/B) Ratio, Aging, Growth of companies, Net Profit Margin percentage, Price EarningsRatio, Trading volume, Dividend yield percentage, Dividend per share andSize of companies.