Topic Name: Relationship of Polycab India Limited with NIFTY 50.
Author: Piyush Raju Vishwakarma (MMS First year, Roll No. 126)
Kohinoor Business School, Kurla
Introduction: Polycab India Limited, a prominent player listed on the National Stock Exchange (NSE) of India, is a leading manufacturer and supplier of high-quality electrical and power cables, wires, and related products. With a strong domestic and international presence, the company serves diverse sectors, including residential, commercial, industrial, and infrastructure projects. Its listing on the NSE reflects its significance in the Indian stock market, where investors and traders closely monitor its performance for insights into the broader electrical and power cable industry and the Indian economy.
Objective: To calculate beta of Polycab India Limited and find out its significance.
Views and Reviews: INDER T JAISINGHANI, Chairman & Managing Director, commented “Our presence has expanded beyond India to over 43 countries around the globe. In more recent years we have brought our expertise in electrical engineering into a whole new range of consumer electricals like Switches and Switchgear, Lighting & Luminaires, Fans, Geysers and home appliances under the Polycab umbrella. In the short number of years that we have been in the market, our products have been quick to establish themselves as amongst the best in the category. All our products are manufactured to exacting standards in our factories in Halol, Baroda, Nasik, Bhilwadi, and Roorkee.”
Data Collection: Data is taken from 01-06-2022 to 31-07-2023. It has been downloaded from NSE site, then Friday’s closing price was sorted and weekly returns of Nifty (i.e. X) and Polycab India Limited (i.e. Y) were calculated.
Data Analysis: Equation “Y = 0.519077419+0.646519957(X)”
(tstat = 2.6342)
n = 45, R2 = 0.138954691, F = 6.939300004
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Polycab India Limited. (y) the positive sign means a negative relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by 0.646519957, “n” means there are 45 observations. The t-stat for b is 2.6342, which means b is statistically significant at 5% level. R2 is 0.138954691 means 13.89% of y is explained by x, balance 86.11% is error due to the variables which are not in model. As the calculated value of F =11.89431 is more than the tabulated F (F 0.05,1DF,48DF) = 4.067, the overall model is not statistically significant at the 5% level.
So overall the model is statistically not significant at the 5% level.
Conclusion: As Beta is 0.646519957 which is less than 1, the share is good for long term.
References: https://polycab.com/about-us/chairman-message/
https://polycab.com/ar2023/pdf/Statutory%20Report.pdf