Author: Megha A. Dhanawade
Introduction:
Maruti Suzuki India Limited (formerly Maruti Udyog Limited) is the Indian subsidiary of Japanese automaker Suzuki Motor Corporation. As of September 2022, the company had a leading market share of 42 percent in the Indian passenger car market. The Government of India established Maruti Udyog Limited in February 1981 as a joint venture with Suzuki Motor Corporation as a small partner. The Government of India partially departed the business in 2003 and then sold all its remaining shares to Suzuki Motor Corporation in 2007. In 1982, Maruti opened its first production facility in Gurugram, Haryana, India
Objectives: To calculate beta of Maruti Suzuki India Ltd. and its significance.
Views & reviews: Maruti Suzuki Limited is the Number 1 automobile company in India, commanding a market share of more than 50% in the 4-wheeler segment. One in every two cars you see on the road today is a Maruti Suzuki. This domination has made Maruti the 14th most-valued company in the Indian stock market. Maruti Suzuki India Ltd share price has been relatively stable in recent years, although it has faced some fluctuations due to market conditions. We can find detailed financial reports and analyst reviews on their website or financial news platforms.
Data Collection: Data is downloaded from.
https://www.nseindia.com/get-quotes/equity?symbol=MARUTI
https://www.nseindia.com/reports-indices-historical-index-data
Data Analysis:
Regression Equation: Return of Maruti Suzuki India Ltd.
Y= A + B * X
Y= (-0.0070) + (-0.5054) * X
R Square = 0.0977 P value = 0.03052
F = 4.9817 N=48
Interpretation: The above equation shows the relationship between NIFTY 50 and Maruti Suzuki India Ltd. share. Return of Maruti Suzuki India Ltd. is dependent variable and Return of NIFTY 50 is independent variable. Here A value is negative that signifies that there is inverse relationship between dependent and independent variable. That means when the Nifty50 rises share price decreases and when the Nifty50 decrease the share price increases. If NIFTY 50 price rises by 1 unit, Maruti Suzuki India Ltd. share price will go down by 0.5054 unit & vice versa. No. of observations are 48. We know that in regression we determine the relationship between the two variables from P value. When the P value is more than 0.05 Null Hypothesis and the P value less than 0.05 is Alternate Hypothesis. Null hypothesis means there is no relationship between the two variable and Alternate Hypothesis means there is relationship between the two variables. Here the P value is 0.0305 which is less than 0.05, so we reject Null Hypothesis, and it means return of nifty50 is statistically significant at 5%. Here the R square is 0.0977 which means 9.7% of Return on Equity is explained by Nifty50 and rest is error due to some other condition, or we can say for other variable which are not in this model. Here the F value is 4.9817 and the P value is 0.0305 which means overall model is statically significant at 5% level.
Conclusion: After doing all the analysis we conclude that our B value is -0.5054 and is the stock that will go up when the market goes up, a positive B value right for you. That if you want to go for long term investment it’s a good option for you.
References:
https://www.nseindia.com/get-quotes/equity?symbol=MARUTI
https://www.nseindia.com/reports-indices-historical-index-data