Title: Relationship of Reliance Chemotex Industries Limited with Nifty and to calculate Beta.
Author: Rehmat Gahlot
Introduction:
Reliance Chemotex was founded by Mr. Shanker Lal Shroff in 1977. Over the last 40 years, they have transformed from a humble spinning mill catering primarily to the local apparel industry into one of the most well-respected spinners of synthetic ecru and dyed yarns that are exported to over 37 countries around the world. Renowned for innovation, quality and a global footprint, the company embraces cutting edge technologies, ensures rigorous quality control and engages in corporate social responsibility and hold a vision for global leadership and a commitment to sustainability. From carpets to awnings and artificial leather to suiting’s our yarns have found their way into more products than you can imagine.
Objective: To calculate Beta and to see its significance.
Literature Review:
1-Reliance Worldwide Corporation Ltd – Prospectus, 2015
Reliance worldwide corporation ltd-prospectus, 2015. Reliance Chemotex Industries Limited (RCIL) is a textile company in the research, development, manufacture, and export of fabrics. The company is in the manufacture of home furnishing yarns, industrial yarns, and apparel yarns. It offers synthetic blended yarns for artificial silk carpets, towels, raised and flat upholstery, mattress tacking, sheeting and covers, awnings, shawls, medical aids and sweater knitting. It offers a variety of yarns including, Ecru polyester yarn, dyed Chenille yarns, Melange yarns, dyed polyester/viscose yarn and Ecru viscose yarn. RCIL also manufactures conveyor belts, artificial leather and vinyl flooring. The company is headquartered in Kolkata, West Bengal, India. The company reported revenues of (Rupee) INR3,648.8 million for the fiscal year ended March 2023 (FY2023), an increase of 0.9% over FY2022. In FY2023, the company’s operating margin was 6.7%, compared to an operating margin of 11.2% in FY2022. In FY2023, the company recorded a net margin of 3.4%, compared to a net margin of 5% in FY2022. Riba textile ltd, Kakatiya textiles ltd, Wire cloth mfg. co. ltd are its key competitors.
2-Tuesday Stock Market Update: Reliance Chemotex
Business World (Feb 28,2023). Experts say that fluctuations are expected in the market even today the stock market continues to witness a downward trend. Rohan Patil, Technical Analyst, SAMCO Securities: “Nifty on 27th February, witnessed a gap down opening below 17,400 levels, and prices continued to trade lower within the range of 17,300 – 17,380 levels throughout the day. Throughout the day Nifty continued to hold above 17,300 levels and prices have formed a bullish Shark Harmonic pattern on the 60 mins chart. On Monday, the market closed on the red mark and this was the seventh consecutive trading session when the market recorded a decline. Experts say that fluctuations are expected in the market even today
The stock market continues to witness a downward trend. On Monday too, the market closed on the red mark and this was the seventh consecutive trading session when the market recorded a decline. The BSE Sensex fell by 175.58 points and closed at 59,288.35 and NSE’s Nifty slipped 73.10 points to close at 17,392.70. Experts say that fluctuations are expected in the market even today.
The Big Gainers: Reliance Chemotex Industries was the biggest gainer of the day. The share jumped by 19.99 per cent and traded at Rs 165.65. It has seen a gain of 17.77 per cent in the last five days.
Data Collection:
The data for Nifty and Equity for Reliance Chemotex Industries Ltd has been downloaded from Nse.com and finance.yahoo.com for the period 1st Nov 2022 to 31st Oct 2023. The data was manipulated for closing price of nifty and equity. The weekly returns of nifty and equity were found.
Data Analysis:
Equation Reliance Chemotex=59.48+0.2844nifty
n=48
R square=0.071
f=3.64
The above equation shows the relationship of Reliance Chemotex Industries Limited with Nifty
If Nifty rises by 1 unit Reliance Chemotex rises by 0.2844 unit.
T stat for b is 1.90 and p value is 0.0625 which is less than 0.05, so b is not equal to 0, meaning nifty impacts reliance chemotex shares.
R square is 0.07, meaning 7% of Reliance Chemoctex share are explained by Nifty, meaning 93% depends on other things like fundamentals
F=3.64, and p value is more than 0.05, so the model is not statistically significant at 5% level
Conclusion
As beta (0.2844) is less than 1, so good for long term investment.
References:
Reliance worldwide corporation ltd – prospectus, 2015. (2015). (). Kuching: Acquisdata Pty Ltd. Retrieved from ProQuest Central Retrieved from https://www.proquest.com/reports/reliance-worldwide-corporation-ltd-prospectus/docview/1806632307/se-2
Tuesday stock market update: Reliance chemotex, RHI magnesita, IRB infra gain in A dull market, tata steel, wipro may witness boom. (2023, Feb 28). Business World, Retrieved from https://www.proquest.com/magazines/tuesday-stock-market-update-reliance-chemotex-rhi/docview/2780319914/se-2