Calculation of Beta for Siyaram Silk Mills Limited and its significance
Name of the author: Sonali Prasad
Introduction:
Siyaram Silk Mills, Ltd., sometimes referred to as Siyaram’s and SSM, is an Indian manufacturer of blended fabrics and apparel with a network of retail stores and branded showrooms. The headquarters of Siyaram’s are located in Lower Parel, Mumbai’s Kamala Mills complex, where the company was founded in 1978.
Siyaram Silk Mills Ltd (SSM) is part of the Siyaram Poddar Group, which also comprises Balkrishna Industries Ltd and Govind Rubber Ltd, all listed companies at Bombay Stock Exchange. With a market capitalization of 936.75 crores, SSM is a small cap corporation. Fabrics, ready-to-wear for men and women, home furnishings, and yarns are all manufactured and sold by Siyaram’s. Throughout 170 branded showrooms are located all over the country, and Siyaram’s is affiliated with over 1 lakh retail establishments. The company’s annualised net profit in the March 2014 quarter was 20.2 crores. Siyaram’s manufactures more than 4 million metres of fabric each month, or more than 60 million metres annually. Among Siyaram’s labels are J Hampstead and Oxemberg.
Objective:
To find out relationship between NIFTY50 and Siyaram Silk Mills Limited equity
Data Collection:
Data of NIFTY50 and Siyaram Silk Mills Limited equity were downloaded from the website of NSE for a period of one year from the date of 1st January 2022 to 31st December 2022. Then friday’s closing prices were recorded as weekly closing prices and calculation was done for weekly return with the help of the formula (Y2 – Y1)/Y1 * 100, where Y2 is the observed friday’s closing price and Y1 is the preceding friday’s closing price. Later, weekly returns of Siyaram Silk Mills Limited were regressed on the weekly return of NIFTY.
Data Analysis:
Equation: Y = 0.5524 + 0.8159X
(1.7167)
In the above equation,
N = 50
R2 = 0.0578
F = 2.9468
Explanation:
The above-mentioned equation tells us about the relationship between the weekly returns of NIFTY50 and Siyaram Silk Mills Limited.
The presence of positive sign in the equation represents that there is direct relationship between the weekly returns of NIFTY50 and Siyaram Silk Mills Limited i.e., if the value of NIFTY50 will rise, there will be a rise in the stock price of Siyaram Silk Mills Limited and if there will be decline in the value of NIFTY50, then there will also be decline in the stock prices of Siyaram Silk Mills Limited. The Co-efficient of NIFTY50 is 0.8159 which means if the weekly return of NIFTY rises by 1 unit, then there will be a rise by 0.8159 in the weekly return of Siyaram Silk Mills Limited and vice versa.
Total number of Observations are 50.
Figure in the bracket is T-stat and the P-Value of which is 0.006 which is less than 0.05 which means p is statistically significant at 3% level. Also, it is less than 0.01 so we can say that p is statistically significant at 1% level.
R2 is 0.0578 which means 5.78% of Siyaram Silk Mills Limited(Y) is explained by NIFTY(X) balance 94.22% is error. Error here is due to variables which aren’t in the model.
F is 2.9468 the P-Value for which is 0.006 which is less than 0.01 which means overall the model is statistically significant.
Conclusion:
As from the above-mentioned regression equation it can be observed that the Beta is 0.5524 which is less than 1 which states the fact that it is NOT good for investment in short term.