Title: Relationship of Praj Industries with Nifty 50
Author: Pratik N Nikale
Introduction: Praj is a globally leading company with a bouquet of sustainable solutions for bioenergy, high purity water, critical process equipment, breweries and industrial wastewater treatment. Headquartered in Pune, India, Praj has spread its presence across the globe with 1000+ References in 100+ countries across all 5 continents.
Objective: To calculate Beta and find its significance
Data Collection: Data of Nifty 50 and data of Praj Industries from the period 01/03/2023 to 28/02/2024. Friday closing prices were calculated and weekly return were found out. Weekly return of Praj Industries were regressed on weekly return of Nifty 50.
Data Analysis: Return of Praj Industries = 0.68 + 0.51 Return of Nifty 50
(1.11)
Observations=48, R Square=0.026, F=1.23, P-value=0.27
The above equation shows the relationship between return of Nifty 50 and return of Praj Industries, Positive sign means direct relationship. If return of Nifty 50 rises return of Praj Industries will rise and vice-versa. If return of Nifty 50 rises by Rs 1, return of Praj Industries will rise by Rs 0.51 vice-versa. t Stat for b is given in bracket as 1.11 and P value for this is 0.27 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 Praj Industries. Number of observation is 48, R Square is 0.026 meaning 2.6% of return of Praj Industries is explained by return of Nifty 50 balance 97.4% is error due to the variables not taken into the model. F is 1.23, the P value is 0.27 which is more than 0.05 so the overall model is not statistically significant.
Conclusion: Beta is 0.51 which is less than 1, so Praj Industries is good for long term investment.