Author- Jainil Patoliya.
Introduction- JK Tyre & Industries Limited is a leading Indian multinational tire manufacturing company. Founded in 1951, it is part of the JK Group conglomerate. The company manufactures a wide range of tire products for passenger cars, commercial vehicles, two-wheelers, and more. With a strong research and development focus, JK Tyre is known for its innovative products and technologies. Listed on the NSE and BSE, it is a part of the Nifty 50 index. As of October 8, 2024, the company’s share price is ₹180.50 (USD 2.20) per share.
Objective- To find out the Beta value of JK Tyre & Industries Limited and it’s Significant.
Data collection- Historical data of JK Tyre & Industries Limited and Nifty 50 has been collected from the NSE website with the time period of 1st May,2023 to 30th April ,2024. The data had been somewhat manipulated to get only Friday closing price, weekly returns of my company and the same for the nifty 50. The first weekly return value has been taken as X for nifty 50 and Y for the JK Tyre & Industries Limited. The next weekly return value has been calculated using excel formula, then at last my company i.e. JK Tyre & Industries Limited has been regressed on nifty 50.
Data analysis: Regression equation; Y (intercept)= JK Tyre & Industries Limited + Nifty 50
Relationship of Nifty 50 and JK Tyre & Industries Limited = -1.178-0.088(-0.118{t-stat})
N=48, R^2=0.0003, F value=0.014, Significance F (P-value) =0.906.
Interpretation: The above equation shows the relationship between weekly returns of Nifty 50 and JK Tyre & Industries Limited. The negative (-) sign before the co-efficient of Nifty 50 tells that if Nifty 50 rises, JK Tyre & Industries Limited will decline and vice versa. If Nifty rise by 1 unit, JK Tyre & Industries Limited will rise by (-0.088) unit. The figure in the bracket is t-stat for beta and the p-value for which is 0.906, which is More than 0.5, which means that beta is not statistically significant at 5% level.
R^2=0.0003 which means 0.03% of JK Tyre & Industries Limited returns are explained by Nifty 50, the balance 99.97% is due to fundamental.
F=0.014 and P value=0.906, which means that overall model is not statistically significant at 5% level.
Conclusion- As per the given data of RELATIONSHIP OF JK Tyre & Industries Limited WITH NIFTY50. We come at the conclusion that the Beta value < 0 and negative, which means that we should avoid this company for investment, as it may be problematic .