TITLE: Relationship of Nifty and Motilal Oswal
AUTHOR: Manmeet Anand
Introduction
Motilal Oswal Financial Services Limited is an Indian financial services company offering a range of financial products and services. The company was founded by Motilal Oswal and Raamdeo Agrawal in 1987.
Motilal Oswal offers a wide range of financial services such as wealth management, broking and distribution, commodity broking, portfolio management services, institutional equities, private equity and investment banking services. It offers wealth management services under the name Purple.
MOFSL has subsidiaries enveloping the different functions in the names of Motilal Oswal Securities (MOSL), Motilal Oswal Investment Advisors (MOIA), Motilal Oswal Commodities Broker (MOCBL) and Motilal Oswal Venture Capital Advisors (MOVC).
Motilal Oswal Financial Services is a known brand among retail and institutional investors in India, with a presence in over 1533 business locations across over 487 cities.
OBJECTIVE: To calculate Beta Value of Motilal Oswals Ltd and find its significance.
VIEWS AND REVIEWS:
Net Sales at Rs 1,024.96 crore in December 2021 up 8.16% from Rs. 947.62 crore in December 2020.Quarterly Net Profit at Rs. 238.29 crore in December 2021 down 28.63% from Rs. 333.87 crore in December 2020.
EBITDA stands at Rs. 457.68 crore in December 2021 down 14.48% from Rs. 535.16 crore in December 2020. Motilal Oswal EPS has decreased to Rs. 16.20 in December 2021 from Rs. 22.84 in December 2020.
Motilal Oswal shares closed at 882.40 on January 31, 2022 (NSE) and has given -5.68% returns over the last 6 months and 43.17% over the last 12 months.
DATA ANALYSIS:
Predicted Y = 0.524470 + 1.1071002 X
N=47, R Square= 0.133522, F= 6.780332
T stat(beta) = 2.603907
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 Motilal Oswal’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Motilal Oswal’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 1.1071002 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.133522 which means 13% of Y (Motilal Oswal) is explained by X. And the balance is explained by error.
F is 6.780332 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 Motilal Oswal.