A Comparative Study of BSE Listed Sectoral Indices of Real Estate and Banking Industry

Abstract

Purpose: Shareholders are the real owners of the company. They provide capital to the business to get a better return on their investment. Maximizing shareholder wealth has become the primary goal of today's business world. No business entity can become profitable without producing a lot for various investors. There are some strategies to determine the organization productivity and valuation of investors. A cutting-edge form of top management, economic value added (EVA) is a way of valuing shareholder wealth. This helps ensure the true productivity of the organization at the expense of value and capital. The concept was first created by Stern Stewart and Co. The company proposed 164 changes in GAAP rules to calculate real economic profit and some changes in economic capital. MVA is another modern way of valuing shareholder wealth. It describes how efficiently a company uses shareholders' assets. The study made two corrections to the calculation of economic benefit and two corrections to the related population. Real estate and banking companies listed on the Bombay Stock Exchange were selected for the study. The purpose of the audit was to determine the value of investors in BSE-listed land and bank units based on EVA and MVA over a period of five years. Speculations were tested using ANOVA and T-TEST. The audit revealed that an organization like Legend Engine Corp expanded its EVA and MVA during this period.

Design/Methodology/Approach: Five BSE listed industries are considered for the present research work and analysed by using EVA and MVA.

Findings/Result: A profitable sector is identified. Opportunity is provided for the investors to buy, sell, or hold the stock to generate more profits in the selected sector. It has been observed that SBI has a high typical EVA unlike various banks but it has decreased in the long run. All financial organizations have a positive relationship between EVA and MVA.

Originality/Value: Among the organizations in the selected countries, Godrej Properties, and DLF ​​are positively associated with MVA and investment wealth creation every 5 years. Choosing stocks from an industry is a big problem for investors because the market is unpredictable and offers more opportunities for traders and investors to buy sell or hold stocks and earn potential profits in the market. This study aims to compare EVA and MVA to provide some recommendations for stock and industry selection to all investors.

Paper Type: Comparative research