INTRODUCTION:
Kalyan Jewellers India Ltd. is a prominent Indian jewelry retail chain with a strong presence across the country and in the Middle East. Known for its vast collection of gold, diamond, and precious stone jewelry, Kalyan Jewellers emphasizes customer trust and product quality. The company caters to a diverse clientele, offering traditional and contemporary designs, and has built a reputation for transparency and customer satisfaction.
OBJECTIVE:
To determine the Beta and its significance for Kalyan Jewellers India Ltd.
DATA COLLECTION:
Data was collected from the NSE website for the period of 1/5/23 to 30/4/2024. The data was filtered to include Friday closing prices. The weekly returns of NIFTY50 and Kalyan Jewellers were calculated, with the weekly return of Kalyan Jewellers designated as Y and NIFTY50 as X. The weekly return of Kalyan Jewellers was then regressed on the weekly return of NIFTY50.
DATA ANALYSIS:
The regression equation is as follows:
text{Weekly Return of Kalyan Jewellers} = -2.04 + 1.35(text{Weekly Return of NIFTY50})
N = 48, , ,
INTERPRETATION:
The regression equation shows the relationship between the weekly return of Kalyan Jewellers and NIFTY50. Since the coefficient of NIFTY50 is positive, it indicates that if NIFTY50 rises, the weekly returns of Kalyan Jewellers will also tend to increase, and vice versa.
The -statistic for the Beta coefficient is 1.89, with a -value of 0.066. Although slightly above the 0.05 significance level, it suggests that Beta is moderately significant at a 10% level.
The value of 0.072 indicates that 7.2% of the variation in Kalyan Jewellers’ returns is explained by NIFTY50 returns, with the remaining variation possibly due to other factors.
The -statistic is 3.56 with a -value of 0.066, indicating that the overall model is moderately significant.
CONCLUSION:
Since the Beta is 1.35, which is above 1, this suggests that Kalyan Jewellers has relatively high volatility in comparison to NIFTY50, making it potentially suitable for short-term investment, though investors should exercise caution given the moderate significance level.