Relationship of Ramco industries ltd. with Nifty
Author: Rutuja Gholap
Introduction: Ramco Industries Ltd is a prominent Indian company with a rich history in the construction and building materials industry. Established in 1961, the company has grown to become a leading manufacturer of a diverse range of products, including asbestos cement sheets, fiber cement boards, and various other building materials. Ramco Industries has earned a reputation for its commitment to quality, innovation, and sustainability in the construction sector. With a strong presence in India and global markets, the company continues to play a significant role in shaping the infrastructure and construction landscape.
Objective: To calculate Beta value of Ramco industries Ltd and find out its significance.
Views and Reviews: Prem Shanker, CEO of Ramco Industries
commented on the occasion, “we diversified into textiles and then moved into new-age building products,” he says. “We also set up a services arm called SmartBuild to execute turnkey projects using our products.”
Today Ramco – a part of the US billion-dollar Ramco Group conglomerate – is known for something a world away from its original operations. “We are a one-stop shop for green dry construction, or environmentally friendly building materials that are made in the factory and assembled on-site,” he says.
Data Collection: Data for the period has been downloaded from this site. Then Friday closing data were find out, weekly returns of Nifty is ‘X’ and weekly returns of Company is ‘Y’.
Data analysis: Equation “Y=-1.96-0.00011(X)”
(tstat = -2.981)
n = 50, R^2 = 0.1562, F = 8.8901
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Ramco Industries Ltd (y) the negative sign means a negative relationship meaning if “x” rises “y” falls and vice versa. If “x” rises by 1 unit, “y” falls by 0.00011 units, “n” means there are 50 observations, and figures in brackets are tstat for “b”, so “b” is not as Calculated tstat for b i.e. -2.981 is lower than tabulated t(t0.5,49DF=2.013) so accept H0 and reject H1. R2 is 0.156 means 15.6% of y is explained by x. As the calculated value of F =8.8901 is more than the tabulated F (F 0.05,1DF,49DF) = 4.110, the overall model is statistically significant at the 5% level.
Conclusion: In this, b<1, which is -0.871, we can say the share is good for long term.
References
https://www.theceomagazine.com/executive-interviews/construction-trades/prem-shanker-2/