Relationship of Nifty50 with Voltas
Author: Vanshika Poray | Roll no: 21230023038 | Batch: Operations & Supply Chain Management
Company Introduction:
Established in 1954, Voltas is a prominent Indian company, a listed public entity, and a proud member of the Tata Group, a leading multinational conglomerate with a presence in over 100 countries. Renowned for its focus on quality, affordability, and a diverse product range, Voltas has become a trusted household name in India.
Holding the title of India’s largest air conditioning company, Voltas offers a comprehensive portfolio of cooling solutions and home appliances. This includes room air conditioners, air coolers, air purifiers, refrigerators, washing machines, water dispensers, dishwashers, microwaves, and even commercial refrigeration equipment.
Objective: To calculate beta of Voltas and its significance.
View And Reviews:
- Pradeep Bakshi, MD & CEO, Voltas Limited – “The Finance Minister’s interim budget for 2024-25 reflects a strong commitment to a positive future for the nation. This interim budget sets the stage for a robust and sustainable growth path. It is expected to provide concrete updates on policies and schemes that will shape the future landscape for the Consumer Durables industry in its upcoming edition. It is focused on digitalization, ‘Make in India’ initiatives and a growth-oriented tax environment, to drive employment and economic productivity. The interim budget’s emphasis on infrastructure projects like railways, roads, urban infrastructure, power and the green growth agenda will contribute to a greener and a better tomorrow. The Consumer Durables industry is hopeful that these policies would help the industry to grow substantially in 2024-25.”
- Pradeep Bakshi, MD & CEO, Voltas Limited – “Our journey began in 1954 as a joint venture between Tata sons and Volkart Brothers, and today, we are a diversified business house ranging from consumer goods to mEP to textile machinery to mining & Construction Equipment. We are constantly evolving and transforming to meet the dynamic needs of our customers.”
Data Collection:
Data has been downloaded from Yahoo Finance for 01/02/2023 to 31/01/2024 for Nifty50 and Voltas. Friday closing price are considered and return values are calculated for both. Voltas is the dependent variable and Nifty50 is the independent variable. Data analysis was done to find the dependency of Y (Voltas) on X (Nifty50).
Data:
Data Analysis:
Regression equation: Return of Voltas = 0.498 + 0.231 * (Return of Nifty50)
t-stat of b = 0.658915
P-value of b = 0.513236
R Square = 0.009350191
F = 0.434168
The above equation shows the relationship between Nifty50 and Voltas. Return of Voltas is dependent variable and return of Nifty50 is independent variable. Positive sign implies a direct relation, i.e. if Nifty50 increases, Voltas also increases. If Nifty50 return rises by 1 unit, Voltas return will also rise by 0.231 and vice versa. Number of observations are 48. R square implies 0.93% of variances in Voltas returns are explained by Nifty50 returns, in other words 99.07% error is due to other factors which are not in mentioned.
0.658915 is t- stat value of b and the P-value of it is 0.513236, which is more than 0.05 which implies that returns of Nifty50 is statistically insignificant at 5% level. F is 0.434168. Overall model is statistically insignificant at 5% level.
Conclusion:
Beta is 0.231, which is less than 1, therefore it is not good for short term investment. The model is statistically insignificant at 5% level.
References:
https://cxotoday.com/specials/post-budget-perspectives-voices-that-define-the-financial-landscape/
https://www.voltas.com/ (Annual Report)