RESEARCH METHODOLOGY ASSIGNMENT
Relation between Nifty and Patanjali Foods Ltd
AUTHOR: – Prinkesh Mistri (FINANCE- 1)
Roll. No.: -21230023711
Introduction: –
Patanjali Foods Limited, established in 1986, is a prominent player in the edible oil industry, known for its integrated approach from farm to fork. With 22 manufacturing units, it boasts a refining capacity of 11,000 tonnes/day, seed crushing capacity of 11,000 tonnes/day, and packaging capacity of 10,000 tonnes/day. As a leading FMCG player, the company, with a vast distribution network and sales force, meets domestic demand and exports by-products like soya meal and lecithin. Additionally, it holds exclusive procurement rights to over two lakh hectares of land in India for palm oil production.
Objective: –
To Calculate Beta(β) and its significance of the equity stock of Patanjali Foods Ltd.
Review: –
Amitabh Bachchan: The Bollywood megastar has endorsed Patanjali products and appeared in its advertisements. He has also expressed his admiration for Baba Ramdev and his vision of a healthy India.
Narendra Modi: The Prime Minister of India has praised Patanjali for its contribution to the Swadeshi movement and the promotion of yoga and Ayurveda. He has also inaugurated several Patanjali projects and attended its events.
Data Collection: –
Data was downloaded from nseindia.com for 01/11/2022 to 31/10/2023 for Nifty as well as for Patanjali Foods 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 Patanjali Foods Ltd. Finally, data analysis was done.
Weekly returns of Nifty = X
Weekly returns of Patanjali Equity = Y
Linear Regression was carried out.
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, Patanjali Foods Ltd is the dependent variable and Nifty 50 is the independent variable.
Intercept, a = -0.152
Slope, b = 1.438
R Square = 0.144
F = 8.09
So, the regression equation is given by
Y (Patanjali Foods Ltd.) = -0.152+ 1.438* X (Nifty)
The above equation shows us the relationship between Patanjali Foods Ltd and Nifty. The positive sign indicates that if Nifty rises then the price of Patanjali Foods 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 143.8 and vice versa. t-stat for b (co-efficient of Nifty) is 2.84 and the p-value is 0.0065, statistically significant for Equity at a 95% level. The number of observations is 49.
Conclusion: –
Beta is 1.438, which is greater than 1, which means Patanjali Foods Ltd is good for short-term investment.
Reference: –
https://www.patanjaliayurved.net/