Title: Relationship of Agro Food Tech with Nifty Index
Author: Apeksha Garg
Introduction: – Agro Tech Foods Ltd (ATFL) is a public limited company engaged in the business of manufacturing, marketing, and selling food and food ingredients to consumers and institutional customers. We are affiliated to ConAgra Brands, Inc. of USA, which is one of the world’s largest food companies. Our vision is to become the Best Performing Most Respected Foods Company in India. All our product offerings correspond with our Mission of “Nourishing families… Enriching life”.
Objective: – To calculate beta and find its significance.
Views: –
Commenting on the new product launch and TVC, Asheesh Sharma, Vice President Marketing, Agro Tech Foods Ltd said, “With this launch, Sundrop enters the chocolate confectionery segment and unlocks a huge growth opportunity for the brand. There has been an increasing consumer demand for products that are indulgent and yet nutritious. The launch of Sundrop Duo is a step in the direction of fulfilling an unmet consumer need for indulgent yet nutritious products.
Consolidated Net Profit of ₹1.87 Crores down 37.87% from ₹3.01 Crores in the same quarter of the previous year. The Earnings per Share is ₹0.77, down 37.90% from ₹1.24 in the same quarter of the previous year.
Data collection: – Data was downloaded from the website nseindia.com. Data was extracted for the period 1-11-22 to 31-10-2023, and all the data except the data and closing price for the end of the week were excluded. The returns were calculated with the previous week’s return as the base.
Weekly returns of Nifty = X
Weekly returns of Nestle India Equity = Y
Linear Regression was carried out.
Data Analysis: –
The regression equation is Agro Food Tech = 0.135031 + 0.137577 Nifty
The above equation shows the relationship between Agro Food Tech and Nifty Index. Equity is the dependent variable and Nifty is the independent variable. The correlation is 0.057425 The positive sign indicates that, if Nifty rises Equity also rises, and vice versa. If Nifty rises one unit i.e., Nifty rises by one rupee then Equity will rise by 0.003297688 paise. t-stat for b (co-efficient of Nifty) is 0.39434 and the p-value is 0.6951. Number of observations are 49. R squared is 0.032, which means less than 0.33 % of change in Equity is explained by Nifty, which means 99.67 % is the error due to variables, which are not included in the model. F is 0.155 and the p-value is 0.6951, which means the model is not statistically significant
Conclusions:
Beta is 0.3488
Since Beta is 0.348 which is less than 1, it is advisable to invest for a long time as it is less volatile.
References:
[1] https://economictimes.indiatimes.com/markets/expert-view/bharat-is-discovering-nestle-brands-there-is-secular-growth-suresh-narayanan/articleshow/102297445.cms