Title – Relationship between Nifty 50 index and Kajaria Ceramics Limited
Author – Ketan Rajpurohit
F2 Batch
Introduction
Kajaria Ceramics is the largest manufacturer of ceramic in India. It has an annual aggregate capacity of 86.47 mn. sq. meters, distributed across seven plants – Sikandrabad in Uttar Pradesh, Gailpur & Malootana in Rajasthan, Srikalahasti in Andhra Pradesh, Balanagar in Telangana and two plants in Gujarat.
Kajaria’s manufacturing units are equipped with cutting edge modern technology. Intense automation, robotic car application and a zero chance for human error are few reasons for Kajaria to be the number 1 in the industry.
Objective
To find beta and its significance.
Views and Reviews
- The sales of Kajaria ceramics are constantly growing from previous 5 years and the net profit is also growing which is a sign of a Mature Company. And the borrowings of the company are also reducing and the reserves of the company is also growing which also indicates a good sign for the company.
- Kajaria ceramics Q2 results | Net profit rises 55% to 108 crores, declares dividend of Rs 6 per share.
Data Collection
The data for the analysis was collected from Historical data of Nifty 50 index and Kajaria ceramics limited from yahoo Finance further the data was classified into date from 1/10/22 to 30/9/2023 and there closing balance for the day till Friday and then calculated the returns of both nifty 50 index (X) and kajaria ceramics (Y) in the table form in excel and then considering the returns of both we find regression.
Data Analysis
The regression equation for the data is –
Y = 0.203279422 + 0.545161633x
The above equation shows the relation between Nifty50 and Kajaria Ceramics
Return of Kajaria Ceramics. is dependent variable and return of Nifty50 is independent variable.
The number of observations are 49.
1.487573916 is the t-stat for Y, the p-value for which is 0.143542142.
R square is 0.04496539 which means 4% of variances in Kajaria Ceramics are explained by Nifty.
F is 2.212876154, p-value for this is 0.143542142 which means the model is statistically significant at the 1% level.
Conclusion
Here the beta is 0.545161633 which is less than 1, which means Kajaria ceramics Limited is good for long term investment.
Reference
Source of data is collected from Yahoo Finance and Screener Yahoo Finance – Stock Market Live, Quotes, Business & Finance News , Popular Stock Screens – Screener