Title: Relationship of Steel Authority of India Limited (SAIL) with Nifty50.
Author: Siddharth Kataria
Intro: Steel Authority Of India Limited (SAIL) is one of the largest steel-making companies in India and one of the Maharana’s of the country’s Central Public Sector Enterprises. SAIL produces iron and steel at five integrated plants and three special steel plants, located principally in the eastern and central regions of India and situated close to domestic sources of raw materials. SAIL manufactures and sells a broad range of steel products.
Objective: To calculate Beta and its significance.
Views and Reviews: SAIL has TTM P/E ratio 26.9 as compared to the sector P/E of 14.47. There are 6 analysts who have initiated coverage on SAIL. There are 4 analysts who have given it a strong buy rating & 1 analyst has given it a buy rating.
Data collection: Nifty and SAIL closing price was collected from NSE website. Weekly return of Nifty is termed as “X” and weekly return of SAIL is termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y=2.0385+0.30461x
Interpretation:
The above equation shows the relation between Nifty50 and SAIL.
Return of SAIL is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of SAIL will also rise by 0.00083 and vice-versa.
Number of observations are 49.
0.198 is the t-stat for Y, the p-value for which is 0.844.
R square is 0.083 which means 0.08% of variances in SAIL are explained by Nifty.
F is 0.0392, p-value for this is 0.844 which means model is statistically significant at 1% level.
Conclusion: Beta is -2.0385 which is less than 1, it means that SAIL is good for long term investment.
Reference:
http://www.livemint.com/market/market-stats/stock-sail-share-price-nse-bse-s0003127
https://www.nseindia.com/report-indices-historical-index-data