TITLE: Relationship of Rolex Rings Limited with NIFTY 50
AUTHOR: Rutuja Ganesh Gavane (Roll no- 0222075, DIV- B)
INTRODUCTION: Rolex Rings Limited is one of the leading manufacturers of forged and machined components in India. Rolex began its journey by manufacturing various ball bearing rings, tapered, cylindrical, railway bearing components, spacers with additional operations such as drilling, grinding and marking. With its 4 decades of experience in the industry, Rolex has accumulated a lot of expertise in the manufacturing transmission components, engine components, chassis components, exhaust system components and bearing rings.
OBJECTIVES: To calculate Beta of Rolex Rings Limited and find out its Significance.
VIEWS AND REVIEWS:
Manesh Dayashankar Madeka, Chairman (2021) said that due to 2020 recession in automotive sector with that issues in Europe and USA from November and December caused its effect on India in 2021 company operations were slow down which resulted into decrease in revenue from somewhere around 900 crore to 616 crore in 2020 and 2021 respectively.
Hiren Dilipbhai Doshi, Chief Financial Officer (2022) said that the growth would be continued in the last quarter of the year. As they do a comparison between last 9 months of previous year with current fiscal 9 months they had a substantial growth of 80%. On annualized basis they are aspiring to have a growth between 60% to 65% what they had in fiscal 21.
DATA COLLECTION: Data from the 1ST July 2022 to the 30TH June 2023 has been downloaded from nseindia.com. From the downloaded data closing price of all Fridays were sorted to find weekly returns of Rolex Rings Limited and NIFTY 50. Weekly return of Rolex Rings was taken as Y and Weekly returns of NIFTY 50 was taken as X.
DATA ANALYSIS:
Y^ = 0.35736 + 0.83230X
(2.61817)
N = 50
R square = 0.1250
F = 6.8548
The above equation shows the relationship between Nifty 50 (X) and Rolex Rings limited (Y). The positive sign means positive relationship meaning if X rises Y also rises and vice versa. If Nifty 50 (X) rises by 1 unit Rolex Rings limited (Y) rise by 0.83230 unit. N means there are 50 observation. T stat for b is 2.61817, is more than tabulated t (t.05,48df = 2.01063) therefor t stat for b is statistically significant @5% level. R square is 0.1250 which means 12.5% of Y is explained by X balance 87.5% is error due to variables which are not in model. F is 6.8548 which is more than table value (F.05,1df,48df = 4.04265) so overall the model is statistically significant at 5% level.
COCLUSIONS:
As, Beta (b) is less than 1, which implies Rolex Rings limited is good for long term investment.