Report
Title: Shree Cement Limited
Author: Shivangi Padhi
Introduction: Shree Cement is an Indian cement manufacturer, founded in Bea war, Rajasthan, in 1979. Now headquartered in Kolkata, West Bengal (Soon to be shifted entirely to Noida), it is one of the biggest cement makers in northern India. Shree cement has moved in the last two decades from having 2 million tons (MT) production capacity to becoming the country’s third largest cement player, with an installed capacity of 43.3 MT in India and 50.4 MT overseas. It also produces and sells power under the name Shree power and Shree mega power.
Objective: To calculate the Beta and its significance.
Literature review: A first year MBA student from one of the prestigious business schools in India is interning at a start-up investment advisory firm. She has been asked to work on her first project, which requires her to do a strategic analysis of Shree Cement Limited (SCL), a North India cement company. This case gives a description of SCL – its origins, management and business; and the characteristics of the Indian cement industry structure, customer segments and major competitors. The case then presents information on performance and strategy of SCL within the cement industry with a view to highlight the strategies adopted by it to gain competitive advantage in the industry. The case allows students an opportunity to carry out industry and competitive analysis, examine the strategy and performance of SCL and identify its sources of competitive advantage.
Data collection: Data for equity and nifty has been downloaded from NSE site for the period from 01st April 2022 to 31st March 2023. Data was edited, cleaned, and manipulated to find closing price of each weekend. Then with help of this data weekly returns were calculated.
Data Analysis: Equity Y = 1.138701*Nifty X – 0.27557+ E
T stat – (4.951565)
N = 49, R2= 0.342, F = 24.518
The above equation tells us about the relationship between equity weekly return Y and Nifty weekly return X. the positive sign means direct relationship which means if nifty weekly return increases, then equities weekly return also increases and vice versa
If nifty’s weekly return increases by 1% then equity’s return increases by 1.138701%. the T stat of b is shown in bracket i.e., 4.951565 and P value for the is 0.00000990721 which means is less than 0.01 meaning B is statistically significant at 1% level
N = 49 and R2 is 0.342 which means 34.2% of Y is explained by X. Balance 65.8% is error.
F is 24.518 and P value for this is 0.00000990721 which is less than 0.01. thus, overall model is significant at 1% level.
References Neeraj Dwivedi, 2018. “Shree Cement Ltd.: Nimble and Focused Wins the Race,” Asian Case Research Journal (ACRJ), World Scientific Publishing Co. Pte. Ltd., vol. 22(01), pages 27-56, June.
Conclusion: The beta is 1.138701 i.e., greater than 1 means Shree Cement Limited is good for short-term investment.