"The Influence of Earnings Per Share on Enterprise Value: An Empirical Study of Non-Banking Financial Companies in India"
Year: 2025
Type: article
Abstract: This paper tries to explore the impact of Earning Per Share on Enterprise value of Non-Banking Financial Companies. The study covers a period of 10 years from 2015 to 2024. To understand how EPS influences EV, other firm-level financial indicators such as Return on Assets (ROA), Debt-to-Equity Ratio (DER) and Current Ratio (CR) has taken into consideration. besides, macroeconomic variables—such as the inflation rate and interest rate (Repo Rate)—can affect both firm performance and investor behaviour, influencing EV either directly or indirectly also has been taken into study. Sample of 50 Non-Banking Financial Companies in India has been considered which are listed on Bombay Stock Exchange. Regression data panel has been employed by using R software. The Two-Way Fixed Effects Model has been used for analysing the panel data of NBFCs in India. The two-way fixed effect model is chosen to control not only for unobserved individual-specific effects but also for time-specific effects that may influence the dependent variable. This allows the model to account for both firm-level heterogeneity and time-related shocks, such as changes in economic conditions or industry-wide events, that could otherwise bias the results. Among the four predictors—log_ROA, log_EPS, log_DER, and log_CR—only log_DER (debt-equity ratio) demonstrates a statistically significant and substantial positive association with the dependent variable. The remaining variables do not exhibit significant effects, suggesting limited explanatory power individually. Interestingly, macroeconomic variables like inflation and bank rate appear to influence firm value from within, albeit moderately.
Author: Dr.Rambali R. Maurya
Institution: University of Mumbai
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4411310733