Title: Relationship between Nifty50 and Star Cement Equity
Author: SUBHRAKIRAN MANDAL
Roll number: 21230023166 (Batch: OPERATIONS AND SUPPLY CHAIN MANAGEMENT)
Introduction:
Star Cement is one of the leading cement manufacturers in the construction industry, recognized for its quality products and strong presence in the market. Established with a vision to contribute to the infrastructure development of the nation, Star Cement has emerged as a key player in the cement manufacturing sector. Star Cement prioritizes sustainability and environmental responsibility in its operations. Star Cement places great emphasis on corporate governance and ethical business practices, fostering trust and credibility among stakeholders. Star Cement is renowned for its customer-centric approach.
Objective:
To consistently produce high-quality cement products that meet or exceed industry standards, ensuring customer satisfaction and loyalty. To maintain and strengthen its position as a market leader in the cement manufacturing industry, both in terms of production capacity and market share. Another objective is to determine the value of ß (Beta) which is the coefficient of variable X, which denotes the relationship between dependent and independent variables.
Views and Reviews:
The share prices of Star Cement have exhibited a resilient and upward trajectory, reflecting the company’s robust performance, strategic initiatives, and positive market sentiment. Investors have shown confidence in Star Cement’s ability to maintain strong fundamentals, including its solid financial position, efficient operations, and consistent revenue growth. Additionally, the company’s focus on innovation, sustainability, and customer satisfaction has further bolstered investor optimism, contributing to steady demand for its shares.
Moreover, the infrastructure development landscape and increasing demand for cement in key markets have provided favourable tailwinds for Star Cement, driving anticipation of sustained growth in the future. Overall, the outlook for Star Cement’s share prices remains optimistic, underpinned by its sound business strategy and promising prospects in the construction industry.
https://www.nseindia.com/
Data collection:
There are two parts in the data collection:
1.Collecting the historical data of Nifty50 from the website of NSE India from 01/02/2023 to 31/01/2024. After collection of the entire data of the given time only the data of Fridays are taken by sorting the whole data. According to the closing data of Nifty 50 of the time, return values are collected using the formula of return.
2.Collecting the historical data of equity (Star Cement) from the website of NSE India from 01/02/2023 to 31/01/2024. After collection of the entire data of the given time only the data of Fridays are taken by sorting the whole data. According to the closing data of Nifty 50 of the time, return values are collected using the formula of return.
Analysis:
The summary output is the result of the regression performed in MS Excel on the two variables which are Nifty 50 returns (Variable X) and SAIL returns (Variable Y). From the summary output, we can write down the equation:
Y= A+ ß*X
Y= 0.11121+ (-0.31906)*X
Y= Weekly returns of SAIL, X= Weekly returns of Nifty50
Interpretation:
1.The above equation shows us the relationship between returns of Nifty50 and returns of Star cement. Here weekly returns of Star Cement are dependent variable and the returns of Nifty50 is the independent variable. The ‘+’ sign in the equation means if the returns of Nifty rises, the returns of Star Cement also rise. Here in the equation, if the returns of Nifty rise by 1 unit, the returns of Star Cement rise 0.012368 paisa.
2.T stat for B (Coefficient of Return on Nifty) is 0.250 and the P value is 0.45173, which means returns of Nifty is statistically not significant for return of Star Cement at 1% level because here significance level (F) is 0.57606 which is not less than 0.05. So null hypothesis will be accepted. Here no. of observations is 48. R2 is 0.012, which means 0.01% of return of SAIL is explained by return of Nifty. Here standard error is 42% means error due to the variables which are not in the model. F is 0.57 and P value of is 0.45173 which means overall model is statistically not significant at 1% significant level.
3.It is Null hypothesis.
Conclusion:
If ß is 1 or more than 1 then it is suitable for short term investment and if ß is less than 1 then it is better for long term investment.
Here ß is -0.319 so it is less than 1 and it is long term investment.