Title: Relationship of Ashok Leyland Ltd with Nifty 50
Author: Aaron J D’souza
Introduction: Ashok Leyland, a part of the Hinduja Group, is a leading manufacturer of commercial vehicles globally. With a presence in over 50 countries, it’s the 2nd largest commercial vehicle manufacturer and 4th largest bus manufacturer worldwide. Ashok Leyland is renowned for its 75-year legacy and $4.5 billion revenue.
Objective: To calculate Beta and find its significance.
Data Collection: Data of Nifty 50 and data of Ashok Leyland from the period 01/03/2023 to 28/02/2024. Friday closing prices were calculated and weekly return were found out. Weekly return of Ashok Leyland were regressed on weekly return of Nifty 50.
Data Analysis: Return of Ashok Leyland = -0.397 + 0.117 Return of Nifty 50
(0.386)
Observations=48, R Square=0.003, F=0.149, P-value=0.701
The above equation shows the relationship between return of Nifty 50 and return of Ashok Leyland Ltd, Positive sign means direct relationship. If return of Nifty 50 rises return of Ashok Leyland will rise and vice-versa. If return of Nifty 50 rises by Rs 1, return of Ashok Leyland will rise by Rs 0.117 vice-versa. t Stat for b is given in bracket as 0.386 and P value for this is 0.701 which is more than 0.05 meaning b is not statistically significant at 5% level meaning return of Nifty 50 does not play a significant role for return of Ashok Leyland. Number of observation is 48, R Square is 0.003 meaning 0.3% of return of Ashok Leyland is explained by return of Nifty 50 balance 99.7% is error due to the variables not taken into the model. F is 0.149, the P value is 0.701 which is more than 0.05 so the overall model is not statistically significant.
Conclusion: Beta is 0.117 which is less than 1, so Ashok Leyland Ltd is good for long term investment.
