TITLE:
Relationship of Nifty and MindTree Pvt LTD
AUTHOR:
Manditya Singh Panwar
Introduction
MindTree Limited is an Indian multinational information technology services and consulting company, headquartered in Bangalore, India. It is a part of the Larsen & Toubro Group. Founded in 1999, the company employs approximately 23,814 employees with an annual revenue of ₹7839.9 crore. MindTree provides a number of products and services including wholesale banking, retail banking, treasury, auto loans, two-wheeler loans, personal loans, loans against property, consumer durable loan, lifestyle loan and credit cards. Along with these various digital products are Payzapp and Smart BUY.
OBJECTIVE:
To calculate Beta Value of MINDTREE and find its significance.
DATA COLLECTION: The data of NIFTY and MindTree was collected through NSE Website and was downloaded from 1-March-2021 to 28-February-2022 in an excel sheet. The closing prices were found out. The data was filtered on weekly basis and then weekly returns of both NIFTY and MINDTREE was calculated. The company returns have been regressed on nifty’s returns.
DATA ANALYSIS:
Predicted Y = 1.2791 + 1.0840X
N=40
R Square= 0.0861974047,
F= 242.3326014
Tstat(beta) = 51.43034
The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is MINDTREE’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and MINDTREE’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 2.3631 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.0861347 which means 8.6% of Y (MINDTREE) is explained by X. And the balance is explained by error.
CONCLUSION:
β is statistically significant in case of NIFTY and MINDTREE. Also, it can be concluded that MINDTREE is a low beta share. Since it is less than 1.