Topic name: “Relationship of the Ambuja Cement limited, with Nifty 50”
Author: Ashish Shyam Adsul (MMS first year, Roll no. 0222001)
Introduction: Ambuja Cement Limited, a leading Indian cement manufacturer established on Oct 20, 1981. Headquartered in Mumbai, it operates with INR 397.51 cr paid-up capital. Revenues range INR 10,000 cr – 25,000 cr for FY ending Mar 2022. Committed to sustainability, it reduces carbon footprint, promotes recycling. EBITDA grew 10.89% YoY, showcasing operational efficiency. Book net-worth increased by 7.01%, reflecting financial strength. A vital contributor to India’s construction sector.
Objective: To Calculate the Beta of Ambuja Cement Limited and find out its significance.
Views and Reviews: Neeraj Akhoury, CEO of Ambuja Cement Limited, Commenting on Ambuja Cement Limited’s commitment to delivering exceptional construction solutions, a company representative stated, “At Ambuja Cement, our goal is to redefine construction by providing top-notch cement products to our customers. We are dedicated to innovation and improving our offerings, ensuring that every project using our cement is of the highest quality and durability.”
Data Collection: Data is collected from July 1, 2022, to June 1, 2023. It has been obtained from a reliable financial source, and weekly closing prices of Nifty (X) and Ambuja cement Limited (Y) have been calculated.
Data Analysis: Equation “Y= 0.37365+ 0.33618(X)”
(tstat = 0.977224)
n = 45, R2 = 0.02172602, F = 0.95496644
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Presistent system ltd (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 0.37365, “n” means there are 45 observations. The t-stat for b is 0.977224, which means b is statistically significant at 5% level. R2 is 0.02172602 means 2.15% of y is explained by x, balance 96.85% is error due to the variables which are not in model. As the calculated value of F =0.95496644 is more than the tabulated F (F 0.05,1DF,44DF) = 6.072, the overall model is statistically significant at the 5% level.
So overall the model is statistically not significant at the 5% level.
Conclusion: As Beta is 0.03316808 which is less than 1, the share is good for long term.