Introduction:
• Mazagon Dock Shipbuilders Limited, Mumbai, an ISO 9001: 2015 Company is one of the leading shipbuilding yards in India. The History of Mazagon Dock dates to 1774, when a small dry dock was constructed in Mazagon. Over the years, MDL has earned a reputation for quality work and established a tradition of skilled and resourceful service to the shipping world in general and the Indian Navy & Coast Guard. It was incorporated as a Private Limited Company in 1934.
• After its takeover by the Government in 1960, Mazagon Dock grew rapidly to become the premier war-shipbuilding yard in India, producing warships for the Navy and offshore structures for the Bombay High. It has grown from a single unit, small ship repair company, into a multi-unit and multi-product company, with significant rise in production, use of modern technology and sophistication of products. The company’s current portfolio of designs spans a wide range of products for both domestic and overseas clients. Since 1960, MDL has built total 799 vessels including 26 warships, from advanced destroyers to missile boats and 6 submarines. MDL had also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessel, water tankers, tugs, dredgers, fishing trawlers, barges & border outposts for various customers in India as well as abroad. MDL have also fabricated and delivered jackets, main decks of wellhead platforms, process platforms, jack-up rigs etc
Objective: To calculate beta of Mazagon Dock and its significance
Data Collection: Data of MAZAGON DOCK (Mazagon Dock Shipbuilders Limited) from 01-12-2021 to 30-11-2022 downloaded from NSE website.
• Friday weekly closing prices has been found out
• Weekly Return have been calculated with the formula of (Y2-Y1)/Y1*100
• Weekly Return of Equity have been regressed on Weekly Return of Nifty
Data Analysis:
Weekly Return of = 2.47001 + 1.057 Weekly Return of Nifty + E
• t-stat = 2.404769154
• R2 = 0.10956
• F = 5.782914683
• N = 49
The above equation tells us about the relationship between Weekly Return of Mazagon Dock Weekly Return of Nifty. The positive sign means that there is a direct relationship. If nifty rises, equity also rise and if nifty falls, equity also fall. The negative sign means that there is a inverse relationship. If nifty rises, equity falls and if nifty falls, equity rises. The co-efficient of weekly return of nifty is 1.057, which means if nifty rises by 1 unit, Mazagon Dock will rise by 1.057 units and vice versa.
• Number of Observations are 49 and t-stat is 2.404769154
• P value is 0.020174512, which is less than 0.05, means that b is statistically significant at 5%. Even it is less than 0.01, b is statistically significant at 1% level.
• R2 is 0.10956, which means that 10.9% of Y (Mazagon Dock) is explained by X (nifty), balance of 89.1% is error. Error is due to the variables which are not in the model.
• F is 5.78291468343046 , the P value for which is 0.020174512 > 0.01, means overall the model is statistically significant.
Conclusion:
Since b = 1.057 is greater than 1, it is statistically significant.
Mazagon Dock is a good option for investment because for every increase in nifty there will a increase in the equity of Mazagon Dock.