TITLE: Relationship of Nifty and Infosys
AUTHOR: Ingit Goyal
Introduction
Infosys Limited is an Indian multinational information technology company that provides business consulting, information technology and outsourcing services. The company was founded in Pune and is headquartered in Bangalore. Infosys is the second-largest Indian IT company after Tata Consultancy Services by 2020 revenue figures and the 602nd largest public company in the world according to Forbes Global 2000 ranking.
Infosys provides software development, maintenance and independent validation services to companies in finance, insurance, manufacturing and other domains
One of its known products is Finacle which is a universal banking solution with various modules for retail and corporate banking.
Its key products and services are:
• NIA – Next Generation Integrated AI Platform (formerly known as Mana)
• Cloud-based enterprise transformation services
• Infosys Information Platform (IIP) – Analytics platform
• EdgeVerve Systems which includes Finacle, a global banking platform
• Panaya Cloud Suite
• Skava – now rebranded as Infosys Equinox
OBJECTIVE: To calculate Beta Value of Infosys and find its significance.
VIEWS AND REVIEWS:
Data Collection:The data of NIFTY and Infosys was collected using NSE Website and was downloaded for 1 March 2021 to 28 February 2022.After downloading the data, closing prices were found.The data was filtered on weekely basis and weekely returns of both NIFTY and Infosys were found out.
DATA ANALYSIS:
Predicted Y = 0.002852+ 0.955971X
N=47, R Square= 0.346210, F= 22.770
Tstat(beta)= 4.7718
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 Infosys’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Infosys’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.955971 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.34621 which means 34% of Y (Infosys) is explained by X. And the balance is explained by error.
F is 22.77 which is more than table value which means model is statistically significant at 5% level.
CONCLUSION:
β is higher than 1 which means there is a significant relation between Infosys and NIFTY and Infosys can move the price of market.It also indicates the volatile nature of share.