TITLE- RELATIONSHIP OF TCS WITH NIFTY 50
Author-TEJAS WAGHMARE
INTRODUCTION
Tata Consultancy Services (TCS) is one of the largest IT services companies in the world, headquartered in Mumbai, India. A subsidiary of the Tata Group, TCS provides a range of services including IT consulting, business solutions, and outsourcing. It operates in more than 46 countries.
Key Metrics
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Revenue: $27.9 billion |
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Net Profit: $5.15 billion |
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Market Capitalization: Over $180 billion |
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Employee Strength: 614,000+ employees |
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Operating Margin: ~25% |
OBJECTIVE
To find out the beta of TCS and its significance
DATA COLLECTION
Data for Nifty 50 and TCS Ltd was downloaded from NSE India for the Current year i.e. 1-4-23 to 31-3-24
Data was manipulated to get Friday closing prices and weekly returns were calculated by the formula (Yt-1 – Yt)/Yt *100
The weekly return of TCS was regressed on the weekly return of Nifty 50
DATA ANALYSIS
Weekly return of TCS = -0.037+ 0.805
2.73(T- Stat Weekly return of Nifty 50)
N=46, R Square= 0.14, F= 7.48, P-Value=0.92
The above Equation shows the relationship between Nifty 50 and TCS,
The positive sign means that if Nifty 50 rises, TCS Ltd will also rise. The coefficient of Nifty 50 has the T-Stat = 2.73 and P-value= 0.92, it is more than 0.05 which means Nifty 50 is not statistically significant to increase prices of TCS.
R-Square= 0.14, meaning .14% of TCS share prices are explained by Nifty 50, 99.95% depends upon other factors like fundamentals.
F= 7.48 and P-value= 0.92 meaning it is more than 0.05 meaning the overall model is not statistically significant
Conclusion
Weekly co-efficient= 0.8 less than 1 but positive, which means it is good for long-term investment.
If this value is more than 1 and positive, it is good for short-term investment if the Nifty 50 is low.
If it is negative, then it is not good to invest in the given stock
Roll no-021330124022