Submitted By:

Vidhi Mehta

Roll no: 11604

 

Introduction:

Voltas Limited is an Indian company specialising in air conditioning and cooling technology. The company is broadly structured into projects and products business. The company was incorporated on 6 September 1954 in Mumbai. It was a collaboration between Tata Sons and Volkart Brothers. The company is broadly structured into projects and products business. The projects business is divided into Domestic Projects Group and International Operations Business Group. Meanwhile, the products business is classified into Unitary Products Business Group, Mining & Construction Equipment Division, and Textile Machinery Division. The Unitary Products business group manufacture products in categories including air conditioners, air coolers, commercial refrigerators, water coolers and water dispensers. Voltasis the largest air-conditioning brand in India. Voltas produced India’s first window air conditioner with DC-inverter-based variable-speed motors. Voltas also has a large network of repair centres. The firm is also a major producer of evaporative coolers, which are widely used for comfort cooling in arid and semi-arid climates. In 2014, Voltas was ranked 39th among India’s most trusted brands according to the Brand Trust Report, a study conducted by Trust Research Advisory.  

 

Objective:

Objective of research is to calculate β of Voltas Ltd and test the significance.

 

Data Collection:

The has been downloaded from NSE website for the period of 1st Feb 2019 to 31st Jan 2020 for Nifty50 and Friday closing prices of Voltas Ltd. The weekly return of Nifty50 and weekly return of Voltas Ltd were used.

Then the weekly returns were calculated for both by using formula
Weekly Return = (B3-B2)/B2*100

Where, B3 is present weak closing price and B2 is the previous week closing
price.

Weekly return of Nifty50 was named as ‘X’ and weekly return of Voltas Ltd was named as ‘Y’.

 

Data Analysis:

From weekly returns of Nifty with Voltas Industry limited
and utilizing the Regression option in Microsoft Excel Data Analytics tool below
values were obtained. Following equation was obtained

Y^ -17919.41578 – 0.070082573

                                               (5.548341001)

N = 51, R2 = 0.385842449, F = 30.78408786

P- Value = 1.15242

 

Conclusion:

Above equations shows the relationship between Nifty50 and Voltas Ltd (‘X’ and ‘Y’). When Nifty50 increases by 1% weekly return on Voltas increases by 0.07%.

Bracket figure indicates value of t-state for which b is coefficient called β.

R2 = 0.3858 which means that 38% market trend on weekly return of Voltas is explained by Nifty50 and remaining 62% is dependent on the fundamental structure and policies relating to Voltas Ltd.

The P-value which is more than 0.05 shows that b is statistically not significant at 5% significance level.

F = 30.78408786, P = 1.15242 which is more than 0.05 which shows that the model is statistically not significant at 5% significance level.