2025, Vol. 6, Issue 1, Part A
Evaluating the impact of liquidity and profitability on share price dynamics: Insights from Indian automobile sector
Author(s): Tharanitharan N S
Abstract: The Indian automobile sectors play a pivotal role in economic landscape by significantly contributing towards GDP and employment. The study investigates the impact of liquidity and profitability indicators on the share price dynamics of 8 selective automobile companies listed in Nifty Auto Index. Using secondary data from company’s annual reports and financial platforms, the study examines the liquidity indicators and profitability indicators. Enterprise Value is used as the market valuation indicator.The analysis considers data for over a period of 5 years from 2019-2020 to 2023-2024 and employs descriptive analysis as well as Karl Pearson’s correlation coefficient to evaluate their relationship among these metrics and their influence on market performance.The results indicate a strong positive correlation between profitability metrics and share price movements, which highlights the importance of operational efficiency and resource utilization in investor’s decision-making process. Liquidity indicators show a moderate positive correlation, while Enterprise Value exhibit a negative correlation with liquidity metrics indicating concerns regarding underutilization of resources.The findings emphasize the importance of efficient financial management that influence investor sentiment and share price movements. The findings aim to provide insights to policy makers and stakeholders by highlighting the financial determinants of market performance.
Pages: 21-25 | Views: 36 | Downloads: 24
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How to cite this article:
Tharanitharan N S. Evaluating the impact of liquidity and profitability on share price dynamics: Insights from Indian automobile sector. Asian J Manage Commerce 2025;6(1):21-25.
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