Author: ANSHUL ARYA
Introduction: Ashok Leyland, flagship of the Hinduja group, is the 2nd largest manufacturer of commercial vehicles in India, the 4th largest manufacturer of buses in the world, and the 19th largest manufacturers of trucks. Headquartered in Chennai, 9 manufacturing plants gives an international footprint – 7 in India, a bus manufacturing facility in Ras Al Khaimah (UAE), one at Leeds, United Kingdom and a joint venture with the Alteams Group for the manufacture of high-press die-casting extruded aluminium components for the automotive and telecommunications sectors, Ashok Leyland has a well-diversified portfolio across the automobile industry. Ashok Leyland has recently been ranked as 34th best brand in India.
Objectives: To calculate beta and find its significance.
Views & Reviews: Britannia Industries is a stock that hasn’t disappointed investors. The company continues to deliver exceptional performance yearly, reflecting Britannia’s share performance. Britannia has delivered a 10-year CAGR of 33% from INR 280 on 25th June 2013 to currently trading at INR 4852.65 per share on 30th nov 2023.
Data collection:
Data is downloaded from https://finance.yahoo.com/quote/ASHOKLEY.NS/history?period1=1664582400&period2=1696032000&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true , https://finance.yahoo.com/quote/%5ENSEI/history?period1=1664582400&period2=1696032000&interval=1d&filter=history&frequency=1d&includeAdjustedClose=true, for 1-10-2022 to 30-09-2023 period.
Data analysis:
Regression Equation: Return of Ashok leyland = 0.0004+0.8076(Return of Nifty 50)
R Square = 0.1169 (2.4945)
F = 6.2226
Interpretation: In the above equation shows the relationship between Nifty 50 and Ashok Leyland share. Return of Ashok Leyland is dependent variable and Return of Nifty 50 is independent variable. positive sign means if Nifty 50 price rises, Ashok Leyland share price rise. If Nifty 50 price rises 1 unit, Ashok Leyland share price will rise by 0.8076 unit & vice versa. No of observation are 49. Figure which is written in bracket 2.4945 is t test for b. The P value for which is 0.01618 which means Nifty 50 is statistically significant at 5% level. R square is 0.1169 which means 11.69% of variances in Ashok Leyland share price are explained by Nifty 50 in other words 82.39% is error means 82.39% is due to the variables which are no in the model. F is 6.2226. Overall model is statistically significant at 5% level.
Conclusion: Beta is 0.0004 is less than 1 it means Ashok Leyland is good for long term investment.
Reference- About the Company | Ashok Leyland India