Title: Relationship of Havells India Ltd with Nifty 50
Author: Harshita Thakur
Introduction:
Havells India Ltd is a prominent electrical equipment company known for its wide range of products, including cables, lighting, and consumer appliances. As a key player in the Indian market, it is listed on the Nifty 50, which comprises the top 50 companies on the National Stock Exchange. Its inclusion in this index reflects its strong market position, robust financial performance, and investor confidence. The relationship enhances Havells’ visibility and credibility, contributing to its growth and access to capital for expansion.
Objective:
To find out Beta of Havells India Ltd and its significance.
Data Collection:
Data for Nifty 50 and Havells India Ltd was downloaded for period 01-05-2023 to 30-04-2024 from NSE site. Then we find out Friday closing prices for Nifty 50 and Havells India Ltd. Weekly returns were calculated by the formula = yt+1 – yt / yt * 100. Weekly returns of Nifty 50 were termed as X and weekly returns of Havells India Ltd were termed as Y.
Y was regress on X.
Data Analysis:
Weekly returns of Havells India Ltd = 0.03 + 1.12 Weekly returns of Nifty 50.
N = 48, R2 = 0.25, F = 15.12, P Value = 0.
The above equation shows the relationship between Nifty 50 and Havells India Ltd. Positive sign before the coefficient of Nifty 50 tells us that there is a positive relationship, if Nifty 50 rises by 1-unit Havells India Ltd will rise by 1.12 and vice versa. Figure in bracket is a T- Stats (3.89) for Beta and P-Value for which 0 which is less than 0.05, meaning Beta is statistically significant. N= 48, R2 = 0.25, which means 25% of Havells India Ltd return explained by Nifty 50. F= 15.12 and the P-Value for that is 0 it is less than 0.05 meaning overall model is statistically significant at 5% level.
Conclusion:
Beta is more than 1 and positive i.e., 1.12 Havells India Ltd is good for short term investment and Nifty 50 is at bottom.