Title: Relationship between Nifty 50 with HCL Technologies Ltd
Author– Hitesh Bachani (21230023485) – Fintech
Introduction: HCL Technologies Limited is a multinational technology company headquartered in Noida, India. It is a leading global provider of IT services and consulting, with a focus on digital transformation, cloud computing, and engineering services. HCL Tech is a part of the HCL Group, one of India’s largest conglomerates.
HCL Technologies was founded in 1976 as HCL Infosystems Limited, a joint venture between Shiv Nadar and Matsushita Electric Industrial Co., Ltd. of Japan. The company started by selling microcomputers and later expanded into IT services. In 1991, HCL Infosystems spun off its IT services division to create HCL Technologies Limited.
HCL Technologies has a global presence with operations in over 50 countries. The company has a large workforce of over 220,000 employees.
HCL Technologies is a publicly traded company on the National Stock Exchange of India and the Bombay Stock Exchange. As of March 31, 2023, the company had a market capitalization of ₹1.2 trillion (US$16 billion).
Overall, HCL Technologies Ltd is a leading global IT services and consulting company with a strong track record of innovation and customer satisfaction. The company is well-positioned for future growth, thanks to its focus on digital transformation, cloud computing, and engineering services.
Objective: To calculate the beta of HCL Technologies Ltd and its significance.
View and Review:
“HCL Tech has been a trusted and transparent partner who has always been willing to travel fast!” – Andy Nallappan, CTO and Head of Software Business Operations, Broadcom Software.
“HCL Tech is a company that is built on innovation and agility. We are constantly evolving, and we are always looking for new ways to better serve our clients.” -C Vijayakumar, CEO of HCL Tech.
Data Collection: The data is downloaded from the 1st of February 2023 to the 31st of January 2024 for Nifty 50 and HCL Technologies Ltd.
Nifty 50 is the independent variable.
HCL Technologies Ltd is the dependent variable.
ANOVA TABLE
Data Analysis
- The equation for the data is:
HCL Technologies Ltd stock = -0.35836 + 0.6387 Nifty 50
N= 48, R Square= 0.107136697, F value= 5.519644525
The above equation shows the relationship between Nifty 50 return and HCL Technologies Ltd.’s stock return. Where Nifty 50 is the independent variable and HCL Technologies Ltd is the dependent variable.
- The negative sign in the equation means that there is an inverse relationship between Nifty 50 and Equity of HCL Technologies Ltd. i.e. if the return of Nifty50 increases then the return of Kotak Mahindra bank will decrease and vice versa.
- The number of observations is 48.
- R-square is 0.107136697 which means 10.71% of HCL Technologies Ltd is explained by Nifty 50. 89.29% % are errors which are not in the model.
- Figures and brackets are the T stats is R-square. The P-value of this is 0.023153026, it is less than 0.5 which means nifty 50 is statistically significant at the 5 % level.
- F is 5.519644525 and the P-value is 0.023153026 which is also less than 0.5 which means the overall model is statistically significant.
Conclusion: The beta is less than 1, therefore, we should invest for long term purpose.
Reference: https://www.hcltech.com/investor-relations/financial-results?year=2023-24
