Author: Laveena Uchil
Introduction:
Larsen & Toubro Infotech Limited (LTI) is an Indian multinational information technology services and consulting company based in Mumbai, India. It has operations in 33 countries. LTI got listed in NSE in July 2016, following which it has grown exponentially. Due to high growth it got included in NIFTY NEXT 50 index by the Nation Stock Exchange (NSE) in February 2020.
Objective: Calculate beta of Larsen & Toubro Infotech & see its significance.
Data Collection:
Data from 1st April 2021 to 31 March 2022 for Larsen & Toubro Infotech and NIFTY was taken from www.nseindia.com. Friday closing prices were calculated.
By the above data collection method we got the values for the following equation,
Y = a + b (X)
Y = 0.5060 + 1.1240 (X)
(3.6454)
Where, Y= LTI Returns
X= NIFTY Returns
a = 0.5060 & b = 1.1240
N= 45
R^2=0.2360
F= 13.2887
Conclusion:
The above equation tells us the relation between X & Y. If X rises by 1 unit Y will rise by 1.12 units & visa-versa. Figure in bracket, that is 3.6454 is the t-stat for b. The p-value for which is 0.0007 is less than 0.05 which means b is statistically significant at 5% level. R^2 is 0.2360 which means 23.60% of Y is explained by X. F is 13.28 & the p-value for which is 0.0007, which is less than 0.05. It means the overall model is statistically significant at 5% level.