Interim Reporting And Its Impact On Stock Price Movement – A Study Of IT Sector

Raghavendra, * and Nayak, Santosh and Shanbhag, Parthesh and Shenoy, Sandeep S and Rao, Guru Prasad (2015) Interim Reporting And Its Impact On Stock Price Movement – A Study Of IT Sector. International Journal of Business and Administration Research Review, 2 (11). pp. 187-191. ISSN 2348-0653

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Abstract

Interim reporting is a means of communicating the results of business operations on a periodic and regular basis by the corporate entities. It has been seen over time that the markets are very sensitive to news of corporate results. The stock markets have tended to react instantly to information which is available in quarterly financial reports. The objective of the study is to find out whether interim reporting has any relation with the stock price. Accordingly, data has been collected for eight quarters from April 2012 to March 2014. Five companies under IT sector form the sample for the study, namely TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra Ltd. The stock risk, return and volatility ten days prior to the announcement of interim reporting and ten days after reporting are calculated and an attempt is made to examine whether the interim reports have any significant effect on the stock price movement. From the study it was observed that for some companies interim reporting has an influence over the stock price, while for some others, no such influence was found. Share price of companies such as TCS, HCL Technologies and Tech Mahindra were influenced by the interim reporting, as there was a significant difference in risk and return prior to and after the announcement of interim results. Also, the stock seemed to react to the interim results favourably, as the stock price was seen going upward even in a falling market. In case of Infosys and Wipro, even though the prior and post returns were different, the difference was not statistically significant. Since the results are mixed, the study concludes that more research is needed in this area.

Item Type: Article
Uncontrolled Keywords: Interim Report, Stock Prices, IT Industry
Subjects: Departments at MU > Commerce
Depositing User: MIM User
Date Deposited: 23 Oct 2015 10:24
Last Modified: 24 Oct 2015 15:18
URI: http://eprints.manipal.edu/id/eprint/144434

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