Author: Tina Umathe
Introduction: Tata Consultancy Services (TCS) is a premier IT services and consulting company within the Tata Group, renowned for its global reach and expertise. Its share price reflects various factors, including financial results, market trends, and industry developments. TCS’s stock has shown robust performance over time, serving as a benchmark for the Indian IT sector. Investors often look to TCS for indicators of market health and technology trends.
Objective: To find out Beta of TCS Company & its Significance.
Data Collection: Data for Nifty50 & TCS Company was downloaded from NSE website, from period 1st May 2023 to 30st April 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: . Weekly returns of TCS Company were regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of TCS Company= -0.092-0.477 Weekly returns of Nifty 50
(-1.559)
N = 48, R2 = 0.0502, F = 2.432, P-value = 0.125
The above equation shows the relationship between Nifty 50 & TCS Company. The negative sign before the coefficient of weekly returns of Nifty 50 means there is negative relationship. If Nifty 50 rise by 1unit, TCS Company will decrease by 0.477 & vice versa. The Coefficient of Nifty 50 has t stat = (-1.559) & the P value of which is 0.125 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=48, No of observations are 48. R2 is 0.050 which means 5% of Weekly returns of TCS Company are explained by Nifty 50. 95% depends upon other factors like financial results, market trends and other factors. F is 2.432 & the P value of this is 0.125 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is negative (-0.47), avoid this investment.