Title: Relationship of Maruti Suzuki India Limited with Nifty 50
Author: Mrunali Ghadashi
Introduction: Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation, leads India’s passenger car market, renowned for its diverse portfolio of 16 models and over 150 variants, spanning from entry-level small cars to luxury sedans. Established in 1981 as a joint venture, Suzuki now holds 56.2% equity. Its activities include manufacturing, sales, pre-owned car sales, fleet management, and car financing, supported by facilities in Gurgaon and Manesar, Haryana, and an R&D center in Rohtak..
Objective: To Calculate Beta and Find its Significance.
Data Collection: Data for Nifty 50 and Maruti Suzuki India Ltd was downloaded from NSE site for the period 01-03-2023 to 28-02-2024. Friday closing prices were calculated weekly returns were found out. Weekly returns of Maruti Suzuki India Ltd were regressed on weekly returns of Nifty 50.
Data Analysis: Maruti Suzuki India Ltd returns = 0.5767 + 0.5897 Nifty 50 returns
T –stat = (1.3724)
n= 47
R2= 0.0773
F= 3.77012
P value= 0.1767
Interpretation: The above equation shows the relationship between Nifty 50 and Maruti Suzuki India Ltd, Positive sign means Direct relationship. If the returns of Nifty 50 increases, the returns of Maruti Suzuki India Ltd increases and vice versa. This equation indicates that for every 1-unit increase in the returns of the Nifty 50 index, the returns of Maruti Suzuki India Ltd are expected to increase by 0.5897 units and vice versa. T- stat for Maruti Suzuki India Ltd is given in bracket and P- value for which is 0.1767 which is more than 0.05, meaning Nifty 50 is not statistically significant at 5% significance level, meaning Nifty 50 returns does not play a significant role for Maruti Suzuki India Ltd. Number of observations are 47. R2 is 0.0773 meaning 7% of Maruti Suzuki India Ltd returns is explained by Nifty 50 returns. Balance 93% is error due to the variable not taken in the model. F value is 3.77012, P value for which is 0.1767, which is more than 0.05. So, the overall model is not statistically significant.
Conclusion: As Beta is 0.5897 which is less than 1, so Maruti Suzuki India Ltd is good for long term investment.