Title : SUZLON
Author : Saloni Prasanna Parab
Introduction : Suzlon Energy’s stock has seen significant volatility over the years. In 2007, the company reached an all-time high of around ₹450 per share, driven by the global interest in renewable energy and its aggressive expansion. However, the 2008 financial crisis caused a steep decline, with shares falling to ₹30-40, worsened by operational challenges. By 2011, Suzlon’s stock remained weak, hovering around ₹50-60 due to rising debt and inefficiencies. The company’s financial troubles persisted, with its stock dropping to ₹20-25 in 2015 as it sold a stake in Senvion to manage its debt. In 2020, the pandemic further drove the stock to a low of ₹2-3, reflecting its continued struggles in a competitive renewable energy market.
Objective : To find out Beta of Suzlon & it’s significance.
Data Collection : Data for Nifty50 & Suzlon was downloaded from NSE website, further period 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula : (Yt-1 – Yt)/Yt*100 Weekly returns of Suzlon was regressed on weekly returns of Nifty50.
Data Analysis : Weekly return of Suzlon = 3.68 + (-3.44)
N = 46, R2 = 0.0036, t stat = (-0.3947), F = 0.1557, P-value = 0.6950
The above equation shows the relationship between Niffty50 & Suzlon. The negative sign before 3.44 means if Nifty raises Suzlon decrease & vice versa. The Coefficient of Nifty50 has t stat = (-0.3947) & the P value of which is 0.6950 meaning Nifty50 is not statistically significant. To increase the prices of Suzlon, R2 is 0.0036 meaning 0.36% of Suzlon prices are explained by Nifty50. 99.9% dependents upon other factors like fundamentals are other factors. F is 0.1557 & the P value of this is 0.6950 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion :
-3.44 coefficient is negative, so avoid this for any investment.