TITLE: Relationship of Nifty and Adani Enterprise
AUTHOR: Alok Gupta
Introduction
Adani Enterprises Ltd is an Indian multinational public company and a subsidiary of Adani Group. It is headquartered in Ahmedabad and has business interests in coal mining and trading, airport operations, edible oils, road, rail and water infrastructure, data centers, hydrocarbon exploration, defence and aerospace, multimodal logistics, and agro commodities. It mainly deals with the group’s integrated resources management, power trading, and natural resources businesses on a standalone basis.
OBJECTIVE: To calculate Beta Value of Adani Enterprises Ltd and find its significance.
VIEWS AND REVIEWS:
Adani Enterprise record loss of 12 crore in Q3 FY22, against a profit of 297 crore in Q3 FY 21. The loss was due to losses in developing business. Total income increased by 61% YoY during the quarter to Rs 18,963 crore due to improved realization on the back of higher index prices in IRM segment.
EBIDTA increased by 4% YoY to Rs 977 crore in Q3 FY22. These results are not comparable with those of previous period due to consolidation of Mumbai Airport. In Q3 FY22, the company took over Jaipur, Guwahati and Thiruvananthapuram airports. With this, AELs airports portfolio now includes 7 operational airports and 1 greenfield airport. During the quarter, Adani Airports witnessed significant improvement in its operations and handled 14.5 million passengers, 1,17,525 air traffic movements and 1,80,353 MT cargo. In the Mining Services segment, significant ramp up in Gare Pelma III, Talabira and Kurmitar mines led to increase in productions volumes by 61% in Q3 FY22.
AEL is the flagship company of Adani Group, one of Indias largest business conglomerates. The companys business investments are centred on the fields of airport management, technology parks, roads, data centre and water infrastructure.
DATA ANALYSIS:
Predicted Y = 1.075288+ 1.679969X
N=47, R Square= 0.208788, F= 11.8747802
T stat(beta) = 3.44598
T stat (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 Adani Enterprise’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Adani Enterprise’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 1.679969 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.208788 which means 20% of Y (Adani Enterprise) is explained by X. And the balance is explained by error.
F is 11.8747802 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 Adani Enterprise.