Title : Relationship of Polycab India with Nifty and to calculate beta .
Author: Palkhi Waman
Introduction:
Polycab is engaged in the business of manufacturing and selling wires and cables and fast moving electrical goods ‘FMEG’ under the ‘POLYCAB’ brand. Apart from wires and cables, we manufacture and sell FMEG products such as electric fans, LED lighting and luminaires, switches and switchgear, solar products and conduits & accessories.
Our promoters collectively have more than four decades of experience among them. Our Company was incorporated as ‘Polycab Wires Private Limited’ on January 10, 1996 at Mumbai as a private limited company under the Companies Act, 1956.
We manufacture and sell a diverse range of wires and cables and our key products in the wires and cables segment are power cables, control cables, instrumentation cables, solar cables, building wires, flexible cables, flexible/single multi core cables, communication cables and others including welding cables, submersible flat and round cables, rubber cables, overhead conductors, railway signaling cables, specialty cables and green wires. In 2009, we diversified into the engineering, procurement and construction ‘EPC’ business, which includes the design, engineering, supply, execution and commissioning of power distribution and rural electrification projects. In 2014, we diversified into the FMEG segment and our key FMEG products are switches and switchgear and conduits & accessories.:
Objective: To calculate Beta and see its significance
Literature Review:Polycab India Ltd (Polycab) is a manufacturer and supplier of wires, cables and fast-moving electrical goods (FMEG). The company’s products includes power cables, solar cables, building wires, LED lighting and luminaires and rubber cables. It also includes electric fans, LED lighting and luminaires, switches, switchgear, solar products, and conduits and accessories. Polycab provides its products under the brand POLYCAB.GlobalData’s Polycab India Ltd (POLYCAB) – Financial Analysis Review provides a comprehensive insight into the company’s history, business structure and operations. The report contains information on the company’s key employees, key competitors and major products and services, as well as detailed financial ratios for the last 5 years.
Polycab India started with just a small electrical retail shop in Mumbai a few decades back and has now evolved into one of India’s leading manufacturers of cables and wires and allied products. In order to scale with the growing demand, the company gradually turned to technology to improve flexibility and scalability. Technology has contributed significantly towards improving the overall performance of the company, achieving overall operational efficiencies and accelerated innovation. In a conversation with Dataquest, Vivek Khanna, executive-president and CIO, Polycab India shared the company’s journey from a small hardware shop in 1968 to India’s largest manufacturer of wires and cables.
Data Collection : The Nifity and Equity Data for Polycab India has been taken from www.nse.com and finance.yahoo.com for the period of 1/11/2022 to 31/10/2023. The Data was manipulated for the closing price of nifty and equity . The weekly returns of nifty and equity were found.
Data Analysis: Polycab India Company – Nifty 50
Regression Analysis:
The regression analysis was conducted using the given equity data, resulting in the following key statistical values:
Polycab share=723.788+0.982 Nifty
n=48 , R square=0.940 , f=723.7885 .
The above values shows the relationship of Polycab india with Nifty. If Nifty rises by 1unit, Polycab will rise by 0.982unit. t- stat for b is1.9702 and the p value is 0.0543 which is more than 0.05, so b=0 , meaning Nifty does not impact polycab india shares.
R square is 0.9402, meaning 9% of Polycab India shares is explained by Nifty, meaning 91% depends on other things like fundamentals.A beta of 26.8836 suggests a high risk of volatility associated with the company’s stock.
f= 723.788 and p value is more than 0.05, so the model is not statistically significant at 5% level.
Conclusion:As Beta value is (26.88) which is greater than 1 suggests a high level of risk and volatility associated with the company’s stock .
Reference : Polycab india ltd (POLYCAB). (2023). (). London: GlobalData plc. Retrieve from ProQuest Central Retrieved https://www.proquest.com/reports/polycab-india-ltd/docview/2468581563/se-2
Rai, S. (2022). How polycab india grew from a small hardware store to a leading manufacturer of cables and wires. Dataquest, Retrieved from https://www.proquest.com/trade-journals/how-polycab-india-grew-small-hardware-store/docview/2703018794/se-2