Relationship between Nifty and Asian Paints
Author – Anshula Ninawe
Roll no – 21230023610
INTRODUCTION :-
Asian Paints Ltd is an Indian multinational paint company, headquartered in Mumbai, Maharashtra, India. The company is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home décor, bath fittings and providing related services. Asian Paints is India’s largest paints company by market share. It is the holding company of Berger International. The company’s manufacturing operations encompass 15 countries of the world including India, with considerable presence in the Indian subcontinent and the Middle East. The company is renowned for its diverse range of paints and coatings. Asian Paints produces a wide variety of products, including decorative paints, industrial coatings, automotive coatings, and related products. The brand is known for its innovation in color and technology, offering a vast array of options for consumers. Asian Paints has a dominant presence in the Indian paint industry and has expanded its footprint globally. The company’s international operations include subsidiaries, joint ventures, and associates in countries such as Bangladesh, Oman, Sri Lanka, Fiji, and others. Asian Paints places a strong emphasis on innovation and technology. The company invests in research and development to create cutting-edge products, environmentally friendly paints, and solutions that cater to evolving customer needs.
OBJECTIVE :- To calculate beta and its significance
VIEWS AND REVIEWS :-
- Shares of paint manufacturers rose in the morning trade on November 17 as crude prices dropped to a four-month low, sparking hopes of lower input costs. Crude derivatives are key raw materials for paint manufacturing, accounting for almost 40 percent of the input bill for paint manufacturers. A fall in the price of crude can mean wider profit margins. The benchmark Brent crude has fallen around 6 percent in the past two sessions to a four-month low of $76.60 a barrel on the back of a higher-than-expected rise in US inventories. Aside from that, a rebound in US treasury yields and concerns over global oil demand also contributed to the price fall.
- Bajaj Financial Securities Ltd says, “Asian Paints Ltd. is more than just a name in the paint industry; it’s a part of our collective Indian experience. When we look around our homes and offices, appreciating the depth of the colours, it’s not solely about the paint itself. It’s about the stories, the milestones, and the choices that each shade represents. Many of us have witnessed the transformative impact of Asian Paints, whether it’s bringing life to a new home, adding character to an office space, or simply refreshing an old room. This trust in Asian Paints isn’t just born out of its product quality but the consistent experience the brand offers”.
- Livemint says “New Delhi: India’s largest paints company Asian Paints Ltd reported a consolidated net profit of ₹1,205.4 crore for the September quarter, up 54% from ₹782.7 crore a year ago, despite flat revenue growth. Its revenue rose a mere 0.3% to ₹8,478.57 crore during the quarter under review, primarily due to sluggish demand, a delayed festive season as well as erratic monsoon rains. “Erratic monsoon impacted market sentiment potentially leading to deferment of sale to October given the late Diwali this year. Growth in automotive and refinish business was decent. In contrast, our general industrial coatings business sustained its double-digit growth trajectory,” said Amit Syngle, managing director and chief executive, Asian Paints. “Operational, formulation and sourcing efficiencies coupled with moderating raw material prices benefitted our margins in Q2 resulted in strong profit growth.”
DATA COLLECTION :-
Collecting the historical data of Nifty50 and equity prices of Asian Paints from the website of yahoo finance from 01/11/2022 to 31/10/2023. After collection of the entire data in the given period only data of Fridays are taken by sorting the whole data. According to data, return values are collected using formula of return.
DATA ANALYSIS :-
Asian paints = -0.1906 + 0.662198 nifty
N = 49, R square = 0.1257, F = 6.759496, P value = 0.012423
The above equation shows us the relation between Nifty 50 Index price and Asian paints Ltd equity price. Asian paints is dependent variable and Nifty 50 is independent variable. The “T” sign means the rise in Nifty 50 leads to rise in Asian paints Ltd and vice versa. If Nifty rises by 1 unit, Asian paints rises by 66 paisa.
T Stat for B (Coefficient of Nifty) is 2.599 and P value is 0.01243 which means Nifty is statistically significant for Asian Paints at one percent level
Number of observations are 49
R square is 0.1257 which means 12.57% of Asian Paints is explained by Nifty. Meaning
87.43% is the error due to the variable which is not in the model.
CONCLUSION :- In case of Asian Paints, Beta is 0.6622 which is less than 1 which means Asian
paints is good for long term investment.
REFERENCE : https://finance.yahoo.com/quote/ASIANPAINT.NS/history/
https://finance.yahoo.com/quote/%5ENSEI/history/
