Aayushi Nath (SAP – 80012100404)
NMIMS Navi Mumbai
MBA’23
Introduction
Asian Paints is India’s leading paint company with a group turnover of Rs 217 billion. The group has an enviable reputation in the corporate world for professionalism, fast track growth, and building shareholder equity. Asian Paints operates in 15 countries and has 26 paint manufacturing facilities in the world servicing consumers in over 60 countries. Besides Asian Paints, the group operates around the world through its subsidiaries – Asian Paints Berger, Apco Coatings, SCIB Paints, Taubmans, Asian Paints Causeway and Kadisco Asian Paints. The company has a market capitalisation of Rs. Cr.) 291,787.
Objective
To calculate beta of the company and find its significance
Recent Updates
Asian Paints records 18% yoy rise in Q3 PAT to Rs1,015.69cr, revenue scales up by nearly 26% yoy
“The steep and unprecedented inflationary trend in raw material prices continued to impact the Gross margins across businesses this quarter. Substantial price increases have been taken in November and December to mitigate this inflation impact, improving the margins on a sequential basis. We continue to work strongly in enhancing the value proposition for our customers across all business segments and thereby deliver sustained value creation for all our stakeholders,” the MD and CEO added.
Data Collection
Data of index and equity were collected from https://www1.nseindia.com/ and https://www.nseindia.com/ respectively. Daily returns from 1st March-2021 to 28 Feb-2022 were downloaded in excel format from these websites and it was sorted into weekly format. Then weekly returns were calculated for both index and equity and then regression analysis was done.
Data Analysis
N=47, R Square= 0.483451282
0.135527, F= 42.1166619
6.898041
Tstat (beta) = 13.327782 / 6.24053832901454
Tstat (0.05,45)= 2.0141
The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is Asian Paints Ltd’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Asian Paints Ltd’s weekly returns.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.483451282 which means 48.35% of Y (Asian Paints Ltd) is explained by X. And the balance is explained by error.
F is 42.1166619 which is more than table value which means model is statistically significant at 5% level.
Conclusion
β is statistically significant in case of NIFTY and Asian Paints ltd. Also, it can be concluded that Asian Paints ltd is a low beta share, Since it is less than 1.