RESEARCH REPORT
TITLE: Relationship between Nifty50 & JK Tyre & Industries Ltd
AUTHOR: JANHAVI P PARADKAR
INTRODUCTION: JK Tyre & Industries Ltd
The company has been the pioneer of radial tyres in India and is currently the market leader in Truck/Bus radials in the domestic market. With 9 plants in India and 3 plants in, Mexico, JK Tyre caters to all segments starting from farm to off-roaders and exports to more than 100 countries across the world. With state-of-the-art production facilities, JK Tyre produces more than 35 million tyres, annually. Starting from New York Taxis to the Sedans lying on the highways of Europe, JK Tyre is present in 6 continents across the globe.
Objectives: To find out the relationship between Beta and its significance
Views and Reviews:
Net Sales at Rs 3,897.53 crore in September 2023 up 3.75% from Rs. 3,756.52 crore in September 2022. Quarterly Net Profit at Rs. 242.11 crore in September 2023 up 371.86% from Rs. 51.31 crore in September 2022.
EBITDA stands at Rs. 596.93 crore in September 2023 up 95.58% from Rs. 305.21 crore in September 2022.
JK Tyre & Ind EPS has increased to Rs. 9.33 in September 2023 from Rs. 2.08 in September 2022.
Data collection:
Data was downloaded from nseindia.com for the period 01-10-2022 to 30-09-2023. For finding out the returns all the columns were deleted except for the date and closing price wherein only Friday’s closing price was taken into consideration. Returns for X and Y were calculated, X being returns of Nifty 50 and Y being returns of JK Tyre. Finally, data analysis for regression was carried out successfully.
Data analysis:
Equation: Returns on JK TYRES & INDUSTRIES = -0.0041691 1.004022 return on Nifty 50
t-stat for b = -0.477166
R Square = 0.8474662
F = 266.68428
The above equation shows the relationship between Nifty 50 and JK Tyre. Return on JK Tyre is dependent variable and return on Nifty 50 is independent. A negative sign means if Nifty 50 decreases JK Tyre also decreases. If the Nifty 50 price falls by 1 unit, JK Tyre’s share price decreases by 1.004022 and vice versa. The p-value is 0.6354091 which indicates that Nifty 50 is statistically significant at the 5% level. R-square is 0.8474662 which means 84.7466% of variances in JK Tyre share price are explained by Nifty 50 in other words 0.152534 is an error which also explains 15.2534 is due to the variables which are not in the model. F is 266.68428. The overall model is statistically significant.
Conclusion:
Beta is –-0.0041691 which is less than 1, therefore it is good for long-term investment.
References:
https://www.nseindia.com/
Relationship between Nifty50 & Jk Tyres and industries Ltd
