Author: PRATIK SOMANI
Roll no.: 21230023500
Batch: F-3
Introduction:
Punjab National Bank. PNB is a state-owned financial services company headquartered in New Delhi, India. It was founded in 1895 and is one of the oldest and largest banks in India. PNB offers a range of banking and financial products and services to individuals, small businesses, and large corporations, including loans, savings and checking accounts, credit cards, insurance, and investment products. It also has a significant international presence, with branches and representative offices in several countries around the world.
Views and Reviews:
Punjab National Bank has seen its shares perform exceptionally well this year so far, rewarding its shareholders with a return of 53%. During this period, the stock has appreciated from ₹56.80 apiece to the current level of ₹86.40.
This marks the stock’s third consecutive yearly return. In CY21, it gained 12.86%, and in the following year, it rallied another 51.34%. Currently, the stock is ranked as the top gainer in the Nifty Bank index, with a yearly return of 55.4%.
The bank’s pre-provision operating profit (PPOP) stood at ₹6,216 in Q2FY24, registering a growth of 11.67% over the corresponding quarter of the previous year at ₹5,567 crore.
The provisions dropped 29.8% YoY to ₹3,444 crore. The drop in provisions and improvement in operating profit growth led the bank to record a net profit of ₹1,756 crore in Q2 FY24, the highest in 14 quarters, with a 327% YoY improvement. During the same period last year, the bank recorded a net profit of ₹411 crore.
Data Collection:
Data is carried from the NSE India site.
Friday closing prices of Nifty50 are followed.
The weekly returns of PNB are followed.
The weekly closing returns of Nifty50 are considered X variable, and the weekly closing returns of PNB are considered Y variable.
Data collection is done from 1st October 2022 to 30th September 2023.
Weekly returns of Nifty = X
Weekly returns of RECL Equity = Y
Linear Regression was carried out.
Data Analysis:
The Regression equation is PNB = 0.0117+ 2.2943Nifty50
The above equation shows the relationship between PNB Limited weekly closing return and Nifty50 weekly closing return.
R-Square = 0.2828
There will be a 28.28% change in PNB due to Nifty50.
Beta= 0.0117
P-Value= 0.00
F= 18.5341
T-Stat= 4.3051
Nifty rises by one rupee then Equity will rise by 2.2943. t-stat for b (co-efficient of Nifty) is
4.3051 and the p-value is 0.00, meaning Nifty is statistically significant for Equity at a 5% level. Number of observations are 49. R squared is 0.2828, which means that Nifty explains 28.28% of the change in Equity, which means 71.72% is the error due to variables not included in the model. F is 18.5341 and the p-value is 0.00, which means the overall model is statistically significant at a 5% level.
Conclusions:
Beta is 0.0117
Since Beta is 0.0117, less than 1, it is advisable to invest for a long time as it is less volatile.
Reference:
https://www.nseindia.com/market-data/
https://www.nseindia.com/get-quotes/equity