Reliance Industries Limited is an Indian multinational conglomerate, headquartered in Mumbai. Its businesses include energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles. Reliance is the largest public company in India by market capitalisation and revenue, and the 100th largest company worldwide. It is India’s largest private tax payer and largest exporter, accounting for 7% of India’s total merchandise exports. The company has relatively little free cash flow and high corporate debt.
Objective: To calculate Beta and its significance.
Views and Reviews: During the Q4FY22 , the company’s overall revenue increased by 36.8% compared to the previous year, reaching ₹211,887 crore. This growth was seen across all segments of the business. On a quarterly basis, there was a 10.8% increase in revenue, primarily driven by the O2C (Oil to Chemicals) and digital service sectors. The Profit After Tax (PAT) reached ₹16,203 crore, showing a 22.5% increase compared to the previous year. However, there was a 12.6% decline in PAT on a quarterly basis due to lower other income and an exceptional gain of ₹2,836 crore reported in the third quarter of the previous fiscal year (Q3FY22).
Data collection: Nifty and Reliance Industries Limited closing price was collected from NSE website. Weekly return of Nifty is termed as “X” and weekly return of Reliance is termed as “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:
Equation: Y= -0.373955963+ 1.202169X
Interpretation:
The above equation shows the relation between Nifty50 and Reliance Industries Limited.
Return of Reliance Industries Limited is dependent variable and return of Nifty50 is independent variable.
Number of observations are 50.
5.60 is the t-stat for Y, the p-value for which is 1.06233.
R square is 0.400594379 which means 40% of variances in Reliance Industries Limited are explained by Nifty.
F is 31.4110, p-value for this is 0.2180 which means model is statistically significant.
Conclusion: Beta is -0.373955963 which is less than 1, it means that Reliance Industries Limites is good for long term investment.