AUTHOR: Prince Mittal (021330024208)
INTRODUCTION: PIDILITE INDUSTRIES
Founded in 1959, is a leading global adhesive manufacturing company headquartered in Andheri East, Mumbai, India. The company is the dominant and leading adhesives company in India. Pidilite also manufactures products across verticals such as art materials and stationery; food and fabric care; car products, adhesives, and sealants; and speciality industrial products like adhesives, pigments; textile resins, leather chemicals, and construction chemicals.
As per the market data, ‘Pidilite Industries Ltd.’s stock trades on the NSE and BSE, with share prices fluctuating around ₹3150-₹3200, reflecting its steady performance in the adhesive industry.
Object: To find out the beta (β) of Pidilite Industries and its significance.
Data Collection: The data was collected by taking the weekly return of NSE (National Stock Exchange) , NIFTY50 and Pidilite Industries of dated time period of 1 year from 1st May 2023 to 30th April 2024 with the help of the NSE site. Friday’s closing price and weekly return were calculated by formula.
The weekly return of Nifty was taken as (X) in terms of company (Pidilite Industries) as Y is taken. Y was regressed on X.
Data analysis: Regression equation; Y (Intercept)= Pidilite Industries + NIFTY 50 (weekly return of nifty)
Relationship of Nifty 50 and Pidilite industries = -0.20 + (-0.33) (-1.12){t-stat})
N = 48, = 0.027, F = 1.26, P(VALUE)= 0.62
The above equation shows the relationship between Nifty 50 and Pidilite Industries, the negative sign before the co-efficient of Nifty 50, Tells us that there is a negative relationship if the nifty rises by 1unit, company will fall by 0.20
And vice versa as the co-efficient of t stats as (-1.12) for beta. The p-value for which is 0.62 which is more than 0.05 meaning beta is not statistically significant.
N=48, =0.027 which means 2.7% of pidilite returns are explained by Nifty 50. Other (97.3%) are variables explained not in the model.
f= 1.26 and the value for that variable is 0.27, it is less than 0.050 meaning the overall model is statistically significant at a 5% level.
Conclusion: As per the given data of RELATIONSHIP OF pidilite Industries LTD WITH NIFTY50. We know that:- beta value < negative, means the company (Pidilite Industries Ltd.) is not good for investment. Showing interest in investment is not beneficial.