Research Methodology Assignment
Title: Relationship of Rajdarshan Industries Limited with Nifty50.
Author: Reetika Aryan (F1 Batch)
Introduction: Rajdarshan Industries Limited is an India-based company engaged in trading of quartz and minerals. The Company is engaged in undertaking drilling operations and business of mining, manufacturing and trading of all type of minerals. The Company started activity after drilling business in the field of raising of lime stone and removal of overburden including transportation thereof on hire / contract basis for various cement Plants. At present the company is engaged in business of Trading of Quartz grit, powder and consumables on commission basis.
Objective: To calculate Beta and find its significance.
Views and Reviews: Past 10 year’s financial track record analysis by Moneyworks4me indicates that Rajdarshan Industries Ltd is a below average quality company.
The key valuation ratios of Rajdarshan Industries Ltd.’s currently when compared to its past seem to suggest it is in the Somewhat overvalued zone.
The Price Trend analysis by MoneyWorks4Me indicates it is Weak which suggest that the price of Rajdarshan Industries Ltd is likely to Fall in the short term. However, please check the rating on Quality and Valuation before investing.
Data collection: Data was downloaded from yahoofinance.com for 01/11/2022 to 31/10/2023 for Nifty as well as for Rajdarshan Industries Ltd. All the columns were deleted for both the sheets except date and closing price and the Friday closing price were found for both. Returns for X and Y were calculated, X being Nifty and Y being Rajdarshan Industries Ltd. Finally, data analysis was done.
Weekly returns of Nifty = X
Weekly returns of Rajdarshan Industries Ltd. = 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:
The regression equation has the form:
Y = a + b*X
Where, Y is the dependent variable,
X is the independent variable,
a is the intercept,
b is the slope.
In our case Rajdarshan Industries Ltd. is the dependent variable and Nifty 50 is the independent variable.
Intercept, a = -120.375
Slope, b = 0.0038
R Square = 0.149
F = 8.422
So, the regression equation is given by-
Y (Rajdarshan Industries Ltd.) = -120.375+ 0.0038* X (Nifty)
The above equation shows us the relationship between Rajdarshan Industries Ltd and Nifty. The positive sign indicates that if Nifty rises then the price of Rajdarshan Industries Ltd shares will also rise and vice-versa. If Nifty rises one unit i.e., Nifty rises by one rupee then Equity will rise by 0.38 and vice versa. t-stat for b (co-efficient of Nifty) is 2.90 and the p-value is 0.0055, statistically significant for Equity at 0.55% level. The number of observations is 50.
Conclusion: Beta is 0.0038 which is less than 1, it means that Rajdarshan Industries Ltd is good for long term investment.
Reference:
http://www.yahoofinance.com/
https://groww.in/stocks/rajdarshan-industries-ltd
http://www.rajdarshanindustrieslimited.com/#
https://www.moneyworks4me.com/indianstocks/small-cap/metals-mining/mining-minerals/rajdarshan-inds/company-info