Title: Apollo Tyres
Author: Advait Utturkar
Introduction: Apollo Tyres is an Indian multinational tyre manufacturing company headquartered in Gurugram, Haryana. It was incorporated in 1972 and has since become a leading name in the manufacture and sale of tyres, catering to over 100 countries. The company has a strong presence in India and Europe, with multiple manufacturing units and a diverse product portfolio that includes passenger vehicle, commercial vehicle, and two-wheeler tyres.
Objective: To find out Beta of Apollo Tyres and its significance
Data Collection: Data for Nifty50 and Apollo Tyres downloaded from NSE website, further period 1st April 2023 and 31st March 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated by the formula: (Yt-1 – YT)/Yt*100 weekly returns of Apollo was regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of Apollo Tyres = 0.55 + (-0.10)
N = 46, R2 = 0.0911, t stat = (-2.0764), F = 4.311, P-value = 0.0438
The above equation shows the relationship between Niffty50 & Apollo Tyres. The negative sign before 0.10 means if Nifty raises Apollo Tyres decrease & vice versa. The Coefficient of Nifty50 has t stat = (-2.0764) and the P-value of which is 0.0438 meaning Nifty50 is statistically significant. To increase the prices of Apollo Tyres, R2 is 0.0911 meaning 0.911% of Apollo Tyres prices are explained by Nifty50. 99.08% dependents upon other factors like fundamentals are other factors. F is 4.3117 and the P-value is 0.0438 meaning it is less than 0.05, which means that the overall model is statistically significant.
Conclusion: Since, the coefficient (-0.10) is negative, avoid this company for further investment.