Author: Khushi Mittal
Introduction:
KPR Mill Limited (formerly known as KPR Cotton Mills Pvt, Ltd.) was originally incorporated on March 19, 2003.KPR Mill Limited is a vertically integrated textile company in India that produces yarn, fabrics, garments, and sugar.
- As of October 7, 2024, KPR Mill’s share price was ₹918.00 on the NSE.
- In the last three years, KPR Mill’s share price has increased by 27.33%.
- In the last five days, KPR Mill’s share price has decreased by 2.70%
OBJECTIVE:
To find out the beta value of KPR Mill ltd and its significance.
Data Collection:
The data of KPR Mill Ltd and Nifty 50, from the period 01.05.2023 to 30.04.2024, was downloaded from NSE’s official website nse.india .
Data was manipulated to find Friday closing prices.
The weekly returns of KPR Mill Ltd and the weekly returns of Nifty 50 were calculated.
The weekly return of Nifty-50 is X and the weekly return of KPR Mill Ltd is Y.
Lastly, the weekly returns of KPR Mill Ltd (Y) were regressed on weekly returns of Nifty 50 (X).
Data Analysis:
Equation
Weekly Returns of KPR Mill Ltd= -0.87 -0.21 weekly Return of Nifty-50
t= (-0.51)
N (no. of observation) = 48
R2 = 0.01
F-Stat= 0.26
P-Value= 0.62
The above equation depicts the relationship between the weekly returns of KPR Mill Ltd and the weekly returns of Nifty-50. The plus (+) sign before the coefficient of Nifty-50 tells that if Nifty-50 rises, then company value rises too, and vice-versa.
If Nifty-50 rises by 1 unit, the company value will rise by 0.92 units. The figure in the bracket is t-stat for beta and the p-value for which is 0.219, which is less than 0.5, meaning beta is statistically significant at 5 percent levels of significance.
R2 value is 0.01, meaning 99.99 percent of KPM Mill ltd returns are explained by Nifty-50, the balance 0.01 percent are maybe due to fundamentals.
F-stat value is 0.26 and the p-value is 0.62, meaning that the overall model is statistically significant.
Conclusion
The beta value for weekly returns of Nifty-50 is less than 1 (β1 = -0.21), signifying that the company i.e., KPM Mill Ltd, should be avoid for the Investment.