Title : Relationship of RamaSteel With Nifty 50
Author : Rohit Gawli
Introduction : Rama Steel Tubes Limited engages in the manufacture and trading of steel pipes and tubes, and rigid poly vinyl chloride and galvanized iron pipes in India and internationally. Ramasteel is a leading manufacturer of steel pipes and tubes, rigid PVC and GI pipes, and square section products in India. The company was incorporated in 1974 and has a market capitalization of ₹2,096 crore. Its share price has ranged from ₹9.90 to ₹17.6 in the past 52 weeks. Ramasteel’s book value is ₹2.18 per share, and it does not currently pay a dividend. The company’s return on capital employed (ROCE) is 12.8%, and its return on equity (ROE) is 10.4%.
Objective : To Find Out Beta of Ramasteel company & its significance
Data Collection : Data for Nifty50 & Ramasteel 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 : Weekly returns of Suzlon was regressed on weekly returns of Nifty50.
Data Analysis : Weekly return of Ramasteel = 4.395096 +1.375312(0.413857)
N = 46, R2 = 0.003878, F = 0.171278, P-value = 0.33
The above equation shows the relationship between Niffty 50 & RamaSteel. The Positive sign before 1.375312 means if Nifty 50 Rises also RamaSteel Also Rises & vice versa. The Coefficient of Nifty50 has t stat = (0.413857) & the P value of which is 0.680989 which is more than 0.05 meaning nifty 50 is not Statistically Significant to Increase the Prices of Ramasteel. To increase the prices of Ramasteel , R2 is 0.003878 meaning of 0.3878% of Ramasteel prices explained by Nifty 50. 99.9% dependents upon other factors like fundamentals are other factors. F is 0.171278 & the P value of this is 0.680989 meaning it is more than 0.05 meaning the overall all model is not statistically significant.
Conclusion : Weekly return of Coefficient is 1.375312 which is more than 1 so it is good for Short term investment
