Title: Relationship of Astral Limited with Nifty 50.
Author: Ashwini Shinde.
MMS – B
Roll no. 0222116
Kohinoor Business School.
Introduction:
Astral Limited started operations in 1998 with manufacturing polymer piping systems for domestic and industrial applications. Astral Limited, which is famous for being the company that first introduced CPVC pipe to India, has successfully extended into other business categories within the building materials sector while also developing a wide range of goods in the Pipes category.
Astral Limited gained customers’ confidence and continued success because to its unwavering commitment to quality and innovation across the whole product line. Astral Limited is a brand that stands for creativity and establishing new standards for the sector. Astral Limited’s brand objective has been to retain and build a dominating presence in the minds of customers and to continually provide promised values.
Objective: To calculate Beta of Astral Limited & its significance.
Views and Reviews: –
Sandeep Engineer, Chairman & Managing Director of Astral Limited stated that during the year, we achieved the highest ever top line and profitability. This strong success in a challenging year was the outcome of our unwavering emphasis on execution, during which we strengthened our core competencies by investing in enlarging our capabilities and distribution networks. Input cost increases and supply-side restrictions dominated the year. We were able to alleviate the situation, nevertheless, by adopting a balanced strategy that included price increases and cost-cutting measures. Both our efforts to increase the exposure of the brand and to broaden our distribution network were successful.
Hiranand Savlani, Chief Financial Officer of Astral Limited stated that by acquiring Gem Paints Private Limited, Astral has now diversified into the paints industry, which provides a significant opportunity for our growth objectives. A threefold increase in volume may be handled by the existing facility’s 36,000 KL capacity without the need for new capital investments. In order to accelerate the expansion in this market area, we also want to make use of our current dealer and distribution network. Beginning in June 2022, the Company also began selling faucets and bathroom accessories under the Astral brand. In this product category, the company will compete in the premium economy area. It will launch operations utilising an asset-light approach and only disclose CAPEX after reaching threshold sales.
Data Collection:
We collected weekly closing prices from Nifty.com from 01-07-2022 to 30-06-2023. Then, we calculated the weekly returns for both Nifty 50 (X) and Astral Limited’s equity (Y) using the Friday closing prices. This helped us understand how both Nifty 50 and Astral Limited performed each week during this time.
Data analysis:
We can write the equation in the form of Y = a + bx
ŷ = – 1.472+1.438x
(2.603)
N=50
R2 = 0.1237
F = 6.7763
Interpretation: The above Equation shows the relationship between the Nifty 50 (X) with Astral Limited (Y). The positive sign means the positive relation meaning that if nifty stock rises, then Astral Limited stock rises and vice versa. If nifty 50 rises by 1 unit Astral Limited rises by 1.43 units. N means there are 50 observations. T is 2.603, is greater than tabulated T (t..05,48 2.0106) T stat for b is statistically significant. R2 is 0.1237 which indicates that the 12.37% of Y is explained by X, balance 87.63% is error due to the variable which not in model. F is 6.7763 which is greater than the table value (F.05, 1,48 4.0420). Overall, the model is statistically significant @5% level of significance.
Conclusion
- B is greater than 1 so Astral Limited share is good for short term.