Relationship of Radico Khaitan ltd. with Nifty 50 and to calculate beta
Author.: RaziyaBano Shaikh
Introduction
The National Stock Exchange introduced the Fifty index on April 21, 1996. The platform facilitates the purchase and sale of a wide range of financial instruments such as equities, derivatives, currencies, and debt securities for brands like. With more than 75 years of expertise in the production of spirits, Radico Khaitan has transformed from a mere spirits distiller for others to a prominent IMFL company with a distinguished brand portfolio. In 1998, Radico Khaitan Limited launched its own brands, driven by the vision of its promoters.
Objective
To calculate beta of Radico Khaitan ltd. and see the significance
Review of Literature
Stock Watch: Radico Khaitan Ltd.
Founded in 1943 and based in New Delhi, Radico Khaitan Ltd. (RKL) (formerly Rampur Distillery Company) RKL’s net revenues grew 2.4% y-o-y to Rs.831.8 crore as against its expectation of Rs.858 crore and average street expectation of Rs.827 crore impacted by IMFL volume decline of 11% as volume of regular and others category declined by 23.4% y-o-y. Prestige and above category (P&A) volume rose17% y-o-y. Gross Margin declined by 215 bps y-o-y to 40.6% due to higher packaging material cost, elevated ENA prices and continued losses in non-IMFL category. Despite a sharp decline in its gross margin, its operating margin (OPM) fell by just 31 bps y-o-y to 9.5% led by lower promotional and advertising expenses. OPM was lower than its expectation of 11.6% and average street expectation of 11.8%.
RKL successfully commissioned a dual feed plant at Rampur in January 2023 within the committed capex estimate and timelines. In January 2023, it also commenced bottling operations at the Sitapur plant, which is the first phase of the greenfield project. Distillation is expected to start at the Sitapur plant from Q2FY24. RKL has incurred capex of Rs.677.6 crore on Rampur Dual Feed and Sitapur greenfield projects since inception.
The Radico Khaitan stock looks good on the daily chart for medium-term investment. It has formed a flag pattern and if it holds at Rs.1100, it will lead the stock to a higher price. The stock trades above all important moving averages like the 200 DMA on the daily chart.
Radico Khaitan, Indus Towers among 5 stocks with RSI trending up
In the ever-shifting landscape of the stock market, identifying promising investment opportunities requires a keen eye for patterns and indicators. Among these, the Relative Strength Index (RSI) is a tool that investors often turn to for valuable insights into stock movements. In this article, we’ll delve into the concept of RSI and explore why it’s crucial to assess stocks based on this indicator. Moreover, we’ll spotlight several stocks that recently experienced RSI trending up.
The RSI is a popular momentum oscillator used in technical analysis. It measures the speed and change of price movements, helping investors evaluate overbought or oversold conditions in a stock. RSI values range from 0 to 100, with readings above 70 indicating that a stock may be overbought, while readings below 30 suggest it could be oversold.
Spotlight on Stocks with RSI Trending UpRelative Strength Index, RSI overbought, Angel One, CreditAccess Grameen, Esab India, MCX, Multi Commodity Exchange, Swan Energy
Data collection
Data is being collected from the https://finance.yahoo.com i.e,[1] and Nseindia.com i.e, [2] website from 1st Nov 2022 to 31st Oct 2023 and data was manipulated to find the weekly data of Nifty 50 and equity
Data Analysis
Equation Radico khaitan ltd.= 67.28+ 0.6510nifty
n=28
R square= 0.536
f=2.18
The above equation shows the relationship of Radico Khaitan ltd. with nifty 50
If Nifty 50 rise by 1 unit in Radico Khaitan ltd. will rise by 0.650 unit
T stat for b is 1.43 and p value is 0.0582 which is less then 0.05, so b is not equal to 0, meaning Nifty impacts Radico khaitan shares.
R square is 0.04, meaning 4% of Radico khaitan are explained by Nifty 50, meaning 96% depends on other things and fundamentals
F= 4.79, and p value is more than 0.05, so the model is not statistically significant at 5% level
Conclusion
As beta is (0.6510) is less than 1, good for long term investment
References:
National Stock Exchange of India
Radico Khaitan, Indus Towers among 5 stocks with RSI trending up [Stock in news]
Stock Watch: Radico Khaitan Ltd.