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name – Rishabh arya Batch – OPS Roll no – 21230023872
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Introduction:
Established in 1978, Reliance Petroleum, a subsidiary of Reliance Industries, stands as a giant in the Indian energy sector. The company’s influence spans across various segments of the petroleum value chain. It operates the world’s largest single-site refinery, producing a significant portion of India’s refined fuel. Additionally, Reliance is a leading producer of petrochemicals, crucial materials for various industries. The company also extends its reach to consumers through its vast network of “Reliance Jio-bp” retail outlets, offering fuel and convenience services. Furthermore, Reliance actively participates in oil and gas exploration and production, both domestically and internationally. Beyond its core business, the company is actively investing in renewable energy sources and exploring new frontiers in hydrogen production and battery storage, demonstrating its commitment to innovation and sustainability. Despite facing challenges like fluctuating oil prices and the shift towards a low-carbon future, Reliance Petroleum’s diverse portfolio, continuous focus on innovation, and commitment to sustainability position it to remain a dominant force in the Indian energy landscape.
Objective:
To find out Beta and its significance.
Views & Reviews:
The company posted a net profit of 17,265.00 Crores in its last quarter. Long-term price forecast Reliance Industries (RELIANCE) can reach ₹3,314.79 by 2025, ₹4,684.24 by 2030, ₹6,177.11 by 2034.
Data Collection:
The closing prices of equity were collected from NSE India Index and Reliance for the period 01/02/2023 to 31/01/2024 considering their weekly close rates calculated the returns and formed the regression analysis.
Data Analysis:
The regression equation is as follows-
Y= -0.04924 + 1.019704X
The above equation shows us the relationship between weekly returns of Nifty 50 and weekly returns of Reliance.
The Weekly returns of Nifty 50 is independent variable, and the weekly returns of Reliance is dependent variable. The negative sign shows that if weekly returns of Nifty 50 increases, weekly returns of Reliance also goes up and vice versa.
It implies that if the weekly returns of Nifty 50 (X) increased by 1 unit, the weekly returns of Reliance (Y) is expected to increase by approximately 1.01970 units.
The number of observations is 48 and the adjusted R square is 0.296675, which means 29% of weekly returns of Reliance Petroleum depends upon weekly returns of Nifty 50. In other words, 71% is error which may be due to other variables which are not taken in the model.
F is 20.825 and P-value is 0.0000374 which means that the overall model is statistically significant at 5% level.
Conclusion:
Since the Beta is more than 1, It is more volatile than the market and hence, Reliance Petroleum is good for long term investment.