Nifty50.
Author: Kinshul Jain
Introduction: Kajaria Ceramics Limited Is the Largest manufacturers of ceramic tiles in India. It was founded in 1985 and has been established for more than 35 years in the ceramic Industry
It is the leading manufacturer of the tile world. It has many different manufacturing plants across India. It is using Modern technology machinery and producing innovative products.
It has an Annual Production capacity of 73 mn square meters. There are a total of 8 manufacturing plants across Sikandrabad (Uttar Pradesh), galipur and malootana (Rajasthan), Vijayawada, and Srikalahasti (Andhra Pradesh), Morbi 3 plants (Gujarat).
Objectives: To calculate beta and find its significance.
Views & Reviews: Kajaria’s share price has grown at ~9% CAGR over
the past five years (from ~| 671 in November, 2017 to ~| 1040 in November, 2022).
Kajaria is a solid play on tiles segment with brand leadership reflecting in
superior realisations & margins. We believe gas price uncertainty is fully
built in and margins will improve from H2FY23.
Data collection:
Data is downloaded from https://www.nseindia.com/get-quotes/equity?symbol=KAJARIACER https://www.niftyindices.com/reports/historical-data for the date- 1/10/2022-30/9/2023
Data analysis:
Regression Equation: Return of Kajari ceramics ltd = -0.3679+0.5417(Return of Nifty 50)
R Square = 0.04656 (1.5150)
F = 2.2952
Interpretation: In the above equation shows the relationship between Nifty 50 and Kajaria ceramics limited. Kajaria ceramics limited is dependent variable and Return of Nifty 50 is independent variable. positive sign means if Nifty 50 price rises, kajaria ceramics limited share price rise. If Nifty 50 price rises 1 unit, Kajaria ceramics limited share price will rise by 0.5417 unit & vice versa. No of observation are 49. Figure which is written in bracket 1.5150 is t test for b. The P value for which is 0.1364 which means Nifty 50 is statistically insignificant at 5% level. R square is 0.04656 which means 4.66% of variances in kajaria ceramics limited share price are explained by Nifty 50 in other words is error means 95.34% iis due to the variables which are not in the model. F is 2.2952. Overall model is statistically insignificant at 5% level.
Conclusion: Beta is -0.2679 is less than 1 it means kajaria ceramics limited is good for long term investment.
References:
https://www.icicidirect.com/mailimages/IDirect_KajariaCeramics_Q2FY23.pdf
https://www.nseindia.com/get-quotes/equity?symbol=KAJARIACER
https://www.niftyindices.com/reports/historical-data
