Author: Anshika Bahedia
Introduction : Asian Paints Ltd is an Indian multinational paint company, headquartered in Mumbai, Maharashtra, India. The company is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home décor, bath fittings and providing of related services. Asian Paints is India’s largest and Asia’s second largest paints corporation. Asian Paints is the holding company of Berger International .The company’s manufacturing operations encompass 15 countries of the world including India, with considerable presence in the Indian
Objective: To calculate Beta of Asian Paints limited and its significance.
Data Collection: Data of Asian Paints Limited from 01-12-2021 to 30-11-2022 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 Asian Paints= -0.0962+1.0632 Weekly return of nifty +E
• t-stat = 4.784
• R2 = 0.3275
• F = 22.891
• N = 49
• The above equation tells us the relationship between Weekly Return of Asian Paints Ltd and Weekly Return of Nifty. The positive sign means that there is a direct relationship. If nifty rises, equity rises and if nifty falls, equity falls. The co-efficient of weekly return of nifty is 1.0632 which means if nifty rises by 1 unit, Asian Paints Ltd equity will rise by 1.0632 units and vice versa.
• Number of Observations are 49 and t-stat is 4.784
• P value is 0, 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 0.3275, which means that 32.75% of Y (Asian Paints) is explained by X (nifty), balance of 67.75% is error. Error is due to the variables which are not in the model.
Conclusion:
Since b = 1.0632 is greater than 1, it is statistically significant.
Asian Paints Ltd. is a good option for investment because for every increase in nifty there will an increase in the equity of Asian Paints.
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