Title: Relationship of Oil and Natural Gas Corporation with Nifty50.
Author: Onkar More
Intro: Oil and Natural Gas Corporation Limited (ONGC) is a prominent Indian central public sector undertaking owned by the Government of India, operating within the Ministry of Petroleum and Natural Gas. Headquartered in New Delhi, it holds the distinction of being the country’s largest government-owned oil and gas explorer and producer. ONGC contributes significantly, producing approximately 70% of India’s crude oil and 84% of its natural gas. Recognized as a Maharatna status holder since November 2010, it was lauded as the leading profit-making Central Public Sector Undertaking in India for the fiscal year 2019–20. Additionally, ONGC holds the impressive 5th position among the Top 250 Global Energy Companies according to Platts
Objective: To calculate Beta and its significance.
Views and Reviews: During the Q3FY23 ,ONGC made a lot more money compared to last year, but in the recent three months, they didn’t earn much more than before. Actually, they earned a bit less money than people expected. The reason their profit went down was because they spent more money on certain things and earned less from other sources during this time. People who invest in ONGC might want to watch how the company deals with changing prices of things they sell and the costs of running their business. This will show if they can make more profit in the coming months.
Data collection: Nifty and ONGC closing price was collected from NSE website. Weekly return of Nifty is termed as “X” and weekly return of Bank of Baroda 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=0.543547+0.718972x
Interpretation:
The above equation shows the relation between Nifty50 and ONGC.
Return of ONGC is dependent variable and return of Nifty50 is independent variable.
Number of observations are 50.
3.74 is the t-stat for Y, the p-value for which is 0.0004.
R square is 0.144108 which means 14% of variances in ONGC are explained by Nifty.
F is 7.913478, p-value for this is 0.0071 which means model is statistically significant.
Conclusion: Beta is 0.543547 which is less than 1, it means that ONGC is good for long term investment.
Reference:
https://www.icicidirect.com/mailimages/IDirect_ONGC_Q3FY23.pdf
https://en.wikipedia.org/wiki/Oil_and_Natural_Gas_Corporation