AUTHOR: Rahul juneja
Introduction
Relaxo Footwears Limited is an Indian multinational footwear manufacturer based in New Delhi. It is the largest footwear manufacturer in India in terms of volume and second-largest in terms of revenue. The company makes products under 10 brands including Flite, Sparx, Bahamas and Schoolmate.
OBJECTIVE: To calculate Beta Value of Relaxo and find its significance.
VIEWS AND REVIEWS:
DATA COLLECTION: The data of NIFTY and Relaxco 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 Relaxo was calculated. The company returns have been regressed on nifty’s returns.
DATA ANALYSIS:
Predicted Y = 0.001803+ 0.096034 X
N=47, R Square= 0.135527, F= 6.898041
Tstat(beta)= 2.62641
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 Relaxo weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Relaxo weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.096034 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.13353 which means 13% of Y (SAIL) is explained by X. And the balance is explained by error.
F is 6.89 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 Relaxo. Also, it can be concluded that Relaxo is a low beta share. Since it is less than 1.