INTRODUCTION OF THE COMPANY
Every Tom, Dick and Harry on Dalal Street wants to be associated with electric vehicles (EVs) and green energy, perhaps the hottest sector right now. Any mention of a company working for the development of the sector gets immediate investor attention.
The management of KPIT Technologies, which has the potential to be a major player as it already serves automotive firms, outlined its progress and future plans in a media interaction. The management has signed major deals in the hydrogen cell field.
KPIT is a leading independent software development and integration partner helping mobility leapfrog towards a clean, smart, and safe future. With 7000 automobiles across the globe specializing in embedded software, AI, and digital solutions, KPIT accelerates clients’ implementation of next-generation technologies for the future mobility roadmap. With engineering centres in Europe, the USA, Japan, China, Thailand, and India, KPIT works with leaders in automotive and mobility and is present where the ecosystem is transforming.
OBJECTIVE
• To calculate β of KPIT and its significance
REVIEWS
“KPIT is uniquely positioned as a 100 per cent automotive software integrator helping large OEMs accelerates their R&D projects in CASE related production platforms. We believe KPIT’s expertise in high entry barrier areas like L3-L5 autonomous driving, vehicle to anywhere connectivity, digital clusters and battery management system enhancement; combined with a strong talent pool (3rd largest auto tech talent pool globally), position it well to gain wallet share in the rapidly growing CASE R&D arena,” Goldman Sachs said.
The company has reported strong Q3FY22 numbers as it has registered 70 per cent year-on-year jump in its consolidated net profit in Q3FY22
DATA COLLECTION
The NIFTY and KPIT data were obtained in an excel sheet from 1-March-2021 to 28-February-2022 through the NSE website. The closing prices were determined. The data was filtered on a weekly basis, and weekly returns for both the NIFTY and the KPIT were computed. The returns of the companies have been regressed against the returns of the nifty.
DATA ANALYSIS
Y’ (Y PREDICTED) = 0.07811867 + -2.67E-06X
Standard error of β = 1.0788E-05
t-stat for β = -0.2474311
t-stat (table) @ 0.05, 45 (dof) = 2.014103
H0: β= 0
Hi: β≠0
As calculated t-stat < t-stat (table value)
Therefore, we don’t reject H0
Therefore, β is not statistically significant at 5% level.
R2 = 0.00138948
So, 0.13% of variance of Y (company-KPIT) are explained by X (NIFTY). The balance 0.9986 is the error.
F = 0.06122216
F @ 0.05, 45 = ~1.7
As calculated F < F table value, so the model is not statistically significant at 5% level.
Y’= 0.07811867 + -2.67E-06X
Or
Y’= -1382.766 + (-0.2474311)X
N=46, R2 =0.00138948, F = 0.06122216
The above regression equation tells us the relationship between X (NIFTY) and Y (company-KPIT).
The positive sign tells us that there is direct relationship. If the NIFTY value rises, the company KPIT value will also rise. From the equation it can be seen that, if x rises by 1 unit, Y will drop by -2.67E-06 units. The figure in bracket (red highlighted) is t-stat for β, which is less than the table value. It means that β is not statistically significant at 5% level.
CONCLUSION
β is not statistically significant in case of NIFTY and KPIT.