INTRODUCTION
JK Cement Ltd. is one of India’s leading manufacturers of Grey Cement and one of the leading White Cement manufacturer in the World. Over four decades, the Company has partnered India’s multi-sectoral infrastructure needs on the strength of its product excellence, customer orientation and technology leadership. JK Cement’s operations commenced with commercial production at its flagship grey cement unit at Nimbahera, Rajasthan in May 1975.
The Company has an installed Grey Cement capacity of 20 MnTPA as on date, making it one of the top cement manufacturers in the Country. One of the leading manufacturers of White Cement, globally, with a total white cement capacity of 1.20 MnTPA and wall putty capacity of 1.2MnTPA. JK White Cement is sold across 43 countries around the globe and the Company has a strong international presence with two subsidies, JK Cement Works Fujairah FZC and JK White Cement (Africa) Ltd.
OBJECTIVE:-
To Calculate Beta of JK cement and its Significance
VIEWS AND REVIEWS
For FY 2022-23, we delivered industry-leading volume growth of 16%, driven by strong domestic demand especially from infrastructure and housing construction sectors. Our revenue from operations increased to ₹9,720 Crores, up 22% from FY 2021-22. However, operating expenses rose 33% y-o-y, primarily on account of higher energy and logistics costs, which weighed significantly on margins. Although net sales realisations increased marginally, the full impact of higher input prices could not be passed through owing to pricing pressure on the back of intensifying competition. We reported EBITDA of ₹1,320 Crores, down 14% while EBITDA margin came in at 13.9% versus 19.6% in the year-earlier period. Input prices have started to ease and are likely to stabilise going forward, which should start flowing into the bottom-line from the second quarter. Our Board of Directors recommended a dividend of ₹15 per share, which remains unchanged from the year earlier
DATA COLLECTION
Weekly returns are calculated
NIFTY :- INDEPENDENT
EQUITY:- DEPENDENT
CONCLUTION:-
JK CEMENT RETURNS:
y=-0.0016-0.2749×nifty 50
beta is less than one so we can invest in the company for the long term or the make the investment for than one year.
- Equation: =−0.0016−0.2749×Nifty 50y=−0.0016−0.2749×Nifty 50
- Interpretation:
y represents the returns of JK Cement.
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- Nifty 50 is a stock market index in India representing the performance of 50 large and well-established companies.
- The coefficient of Nifty 50, which is -0.2749, indicates the sensitivity of JK Cement’s returns to changes in the Nifty 50 index.
- The intercept term, -0.0016, represents the constant component of JK Cement’s returns that is not influenced by the Nifty 50 index.
- Beta:
- Beta is calculated as the coefficient of the Nifty 50 index, which is -0.2749 in this case.
- Since beta is less than one (-0.2749), it indicates that JK Cement is less volatile than the market (Nifty 50).
- A beta less than one generally suggests that the stock is less risky or less volatile compared to the market.
- Investment Implication:
- With a beta less than one, it implies that JK Cement tends to move less than the overall market.
- Investing in a stock with a beta less than one can be considered less risky compared to the broader market, especially for long-term investments.
- If the beta is less than one, it suggests that the stock is less sensitive to market movements, hence it could be suitable for long-term investment horizon or holding the investment for more than one year.
So, based on this interpretation, investing in JK Cement for the long term or holding the investment for more than one year could be a viable strategy, considering its lower volatility compared to the market.
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