Relationship of Nifty 50 with
Shree Ram Fibers Limited (SRF)
Author – Shruti Rupareliya
Introduction: –
SRF’s incorporation in 1970 and the subsequent establishment of our first plant in Manali, near Chennai, India in 1974, we have grown from being a single-unit tyre cord manufacturer into a leading, professionally managed, diversified chemicals conglomerate.
SRF Limited is a multi-business chemicals conglomerate engaged in the manufacturing of industrial and specialty intermediates. The company’s business portfolio covers fluorochemicals, specialty chemicals, packaging films, technical textiles, and coated and laminated fabrics.
Objective of the study: – To calculate the Beta of SRF and its significance.
Views and Reviews: –
- Ashish Bharat Ram (SRF LTD, Chairman): SRF’s progress has always been purposeful – beyond profits and inclusive. Mindfulness in our actions and awareness about the impact of our decisions have helped us be the changemakers for a better tomorrow. It explains why we chose ‘Creating Value, the Sustainable Way’, as the theme of our annual report this year. We remain committed to the sustainable growth of our Business. Backed by a strong sense of purpose, and a clear strategic vision, SRF demonstrated resilience and delivered an exceptional performance in FY23. The company has a strong focus on innovation and research, which has enabled it to develop new products and technologies, staying ahead of the competition. This focus on innovation is often positively viewed by investors and analysts. Our new product portfolio is being enhanced continuously, which also helps us expand and strengthen our customer base further. During FY23, we launched four new products in the agrochemicals space and one product in the pharma segment and our developmental pipeline is stronger than ever. In FY23, our second CMS plant in Daher was commissioned successfully. At approx. 100,000 Metric Tons Per Annum (MTPA), it is one of the largest of its kind plants anywhere in the world. The company has a significant global presence, with a strong customer base across various geographies. This global footprint helps SRF Limited tap into diverse markets and mitigate risks associated with regional economic fluctuations. Its commitment to quality and sustainability across its operations. This focus on quality not only enhances the company’s reputation but also contributes to customer loyalty and long-term success. Our People are at the heart of our success and our continuing endeavors to do better. Our HR policies are crafted to ensure professional growth while contributing to the employee’s sense of pride and well-being. Our record employee engagement scores and people practices have also been recognized externally, as highlighted by our recent inclusion on the Fortune ‘Employers of the Future’ list.
Board of Directors Report: Commenting on the results, Chairman & Managing Director, Ashish Bharat Ram said, “We are closing FY22 on a strong note, with significant growth witnessed in our Chemicals Business and our other businesses too. With a strong CAPEX pipeline and our emphasis on enhancing our capabilities, I remain optimistic of our continued success in the future.” The consolidated revenue of the company grew 36% from ₹2,608 crore to ₹3,549 crore in Q4FY22 when compared with Corresponding Period Last Year (CPLY). The company’s Profit after Tax (PAT) increased 59% from ₹381 crore to ₹606 crore in Q4FY22 when compared with CPLY.SRF Limited might have strengthened its position as a market leader in certain segments or industries where it operates. This leadership position could be attributed to factors such as product quality, brand reputation, and effective marketing strategies. As of March 31, 2022, the company has applied for 361 patents, with ten patents applied during the quarter. Till date, the company has been granted one-hundred and fourteen patents globally.The company’s commitment to sustainability and responsible business practices might have earned it positive reviews from stakeholders. SRF Limited may have implemented initiatives to reduce its environmental footprint, enhance energy efficiency, or promote social responsibility within its operations.
Awards and Recognition
- CII-SR EHS Excellence (Bronze) Award – 2021 for commitment in EHS practices in the large-scale industry category (awarded to the Technical Textiles Business)
- Certificate of Sustainability by BW BUSINESSWORLD – Top 50 category
- CSR Times Award – 2021 (gold category) to SRF Foundation for its Rural Education Program
Data Collection: –
Historical data has been downloaded from 01/02/2023 to 31/01/2024 from www.nseindia.com, and the weekly returns of NIFTY 50 and SRF LTD are calculated from the same.
Y = a + b X
Here Y is the dependent variable (Weekly Returns of SRF LTD) and X is the independent variable (Weekly Returns of NIFTY 50)
SRF Weekly Returns = 0.1486+0.5918 (NIFTY 50 Weekly Returns)
The above equation shows the relationship between Weekly Returns of SRF LTD and NIFTY 50.
Data Analysis:
|
Date |
Nifty 50 Weekly returns |
SRF LTD Weekly Returns |
|
22-Jan-24 |
-1.72 |
-2.41 |
|
15-Jan-24 |
1.26 |
1.76 |
|
8-Jan-24 |
1.26 |
1.52 |
|
1-Jan-24 |
-0.84 |
5.84 |
|
25-Dec-23 |
0.09 |
-0.08 |
|
18-Dec-23 |
-1.76 |
-1.01 |
|
11-Dec-23 |
0.51 |
-0.57 |
|
4-Dec-23 |
-2.27 |
-0.70 |
|
27-Nov-23 |
-3.34 |
-0.41 |
|
20-Nov-23 |
-2.33 |
-2.24 |
|
13-Nov-23 |
-0.32 |
0.08 |
|
6-Nov-23 |
-1.56 |
-0.42 |
|
30-Oct-23 |
-1.00 |
-4.17 |
|
23-Oct-23 |
-0.96 |
-3.46 |
|
16-Oct-23 |
2.60 |
2.71 |
|
9-Oct-23 |
1.06 |
0.94 |
|
2-Oct-23 |
-0.49 |
-0.40 |
|
25-Sep-23 |
-0.08 |
0.13 |
|
18-Sep-23 |
0.18 |
0.71 |
|
11-Sep-23 |
2.63 |
4.68 |
|
4-Sep-23 |
-1.84 |
2.91 |
|
28-Aug-23 |
-1.94 |
-2.30 |
|
21-Aug-23 |
-0.87 |
-3.10 |
|
14-Aug-23 |
0.23 |
-1.39 |
|
7-Aug-23 |
0.61 |
0.79 |
|
31-Jul-23 |
0.46 |
-1.26 |
|
24-Jul-23 |
0.66 |
-4.28 |
|
17-Jul-23 |
0.50 |
1.98 |
|
10-Jul-23 |
-0.91 |
-1.13 |
|
3-Jul-23 |
-1.19 |
1.60 |
|
26-Jun-23 |
-0.74 |
2.97 |
|
19-Jun-23 |
-2.73 |
1.40 |
|
12-Jun-23 |
0.86 |
3.27 |
|
5-Jun-23 |
-1.40 |
1.38 |
|
29-May-23 |
-0.16 |
3.42 |
|
22-May-23 |
-0.19 |
0.08 |
|
15-May-23 |
-1.60 |
-3.14 |
|
8-May-23 |
0.62 |
4.80 |
|
1-May-23 |
-1.34 |
-0.90 |
|
24-Apr-23 |
-0.02 |
0.40 |
|
17-Apr-23 |
-2.44 |
-2.48 |
|
10-Apr-23 |
1.16 |
-1.53 |
|
3-Apr-23 |
-1.28 |
-2.87 |
|
27-Mar-23 |
-1.36 |
1.82 |
|
20-Mar-23 |
-2.39 |
-1.29 |
|
13-Mar-23 |
0.91 |
-3.07 |
|
6-Mar-23 |
1.83 |
-0.65 |
|
27-Feb-23 |
1.04 |
-0.92 |
|
20-Feb-23 |
-0.73 |
-2.07 |
|
13-Feb-23 |
2.74 |
4.22 |
|
6-Feb-23 |
-0.48 |
-1.29 |
|
30-Jan-23 |
-0.02 |
-3.45 |
- No of observations are 52.
- R2 means (0.11) 11% of SRF Weekly Return is explained by Nifty 50 Weekly Returns. The rest 89% errors which are not considered by the model.
- T stat & p-value for b is 0.44, it is greater than 0.05 which means that Nifty 50 Weekly returns are statistically not significant at 5% level.
- F = 6.64 and p = 0.01 which is less than 1 which means the overall model is statistically significant.
Conclusion:
Beta value is 0.14 which is less than 1 which means that we should invest for long term.