Grasim Industry Ltd.

TITLE- Relationship between GRASIM INDUSTRY LTD. and NIFTY to calculate beta. 

AUTHOR- GARGI SAVE

 

 

 

Introduction– Grasim Industries Ltd (Grasim), a subsidiary of Aditya Birla Group, is a manufacturer, distributor and marketer of construction materials. The company operates diversified businesses including, viscose, cement, chemicals, and textiles. It offers a wide range of products such as grey cement, white cement, viscose staple fibre, yarn, pulp, caustic soda, allied chemicals, epoxy, linen and wool. Grasim sells its textile products through a network of exclusive showrooms, also through wholesalers and multi-brand outlets. The company has manufacturing plants, joint ventures and subsidiaries in Sweden, China, India, Sri Lanka, Canada, the Middle East and Bangladesh. 

 

Objective– to calculate beta and to see it’s significance. 

 

LITERATURE REVIEW– 

1.BSE: Grasim Industries Ltd. – Grasim Industries Limited Audited Financial Results For The Financial Year Ended 31St March 2023- 

Summary- Grasim Industries Limited is the flagship company of the Aditya Birla Group. It started as a textiles manufacturer in India in 1947. Today, it is a leading global player in VSF and the largest chemicals (Chlor-Alkali-s) player in India. It is also the largest cement producer and Diversified Financial Services (NBFC, Asset Management and Life Insurance) player in India through its subsidiaries UltraTech Cement and Aditya Birla Capital.

2.Grasim Industries Ltd (GRASIM)

Summary- Increase in the business performance of Viscose segment enables the company to enhance its operations. In FY2018, the segment reported 10.7% increase in sales, which grew to INR85.4 billion, and reported a CAGR of 6.1% during 2014-18. The increase was due to the contribution from the merger of Aditya Birla Nuvo Ltd, and increasing demand for VSF. It also reported increase in EBITDA, which grew to INR16.8 billion in FY2018 from INR14.4 billion in FY2017. The positive outlook for the Indian construction industry could provide new opportunities to Grasim. According to in-house research, the Indian construction industry is expected to grow at a CAGR of 4.74% during the forecast period (2018–2022) to reach INR44.2 trillion in 2022. This industry is anticipated to grow by the population growth, urbanization, public-private partnerships, and the government’s focus on transport infrastructure network. Various government flagship programs including 100 Smart Cities Mission, Housing for All 2022, Aayushman Bharat program, Ude Desh ka Aam Nagrik (UDAN), and Bharatmala scheme are also expected to be driven the growth in the future. The residential construction market is estimated to record a forecast-period CAGR of 6.96% to reach INR12.7 trillion in 2022. This market is expected to be supported by the public and private sector investments to meet the growing demand for housing, and the government’s efforts to build affordable housing units for low- and middle- income population. 

Data Collection– The data collected from Nifty and Equity for Grasim Industry Ltd. has been downloaded from Nse.com and Finance.Yahoo.com for period of 1st-Nov_2022 to 31st-Oct-2023. The data was manipulated for closing price of nifty and equity. The return of nifty and equity were found. 

Data Analysis–  

Grasim Industry Ltd.= -0.1879 + (-0.360) 

n= 23 , R square= 0.1338 

The above equation shows the relation between Grasim Industry ltd. and Nifty. If nifty rises by 1 unit, Grasim Industry Ltd. will rise by 0.360 units. 

t-stat for b is -1.34388 and the p value is 5.17 which is more than 0.05, so b= 0, meaning with nifty doesn’t impact GRASIM INDUSTRY LTD. 

Conclusion– As beta (-0.360) is less than 1, so good for long term investment.

Reference- 

  1. Grasim industries ltd (GRASIM). (2018). (). London: GlobalData plc. Retrieved from ProQuest Central Retrieved from https://www.proquest.com/reports/grasim-industries-ltd/docview/2214938476/se-2

By Gargi Save

Gargi Save(MBA-MARKETING) DIGITAL MARKETING

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