Relationship of Maruti Suzuki India Limited with Nifty 50
Author: Madhushri Elayaperumal Nadar.
Introduction: Maruti Suzuki India Limited, India’s largest passenger vehicle manufacturer, is a joint venture between the Government of India and Suzuki Motor Corporation, Japan. Since 1981, Maruti Suzuki has led the Indian automotive industry with innovative, affordable, and reliable vehicles, commanding a market share of over 47%.
Objective: To find out the beta of Maruti Suzuki India Limited and its significance.
Data Collection: Data of the Maruti Suzuki India Limited and Nifty 50 was downloaded from NSE site for the period 1st May 2023 to 30th April 2024. Data was manipulated to get Friday closing prices and weekly returns were calculated X is for Nifty 50 and Y for Maruti Suzuki India Ltd using the formula (Yt+1-Yt)/Yt*100. Weekly returns of Maruti Suzuki India Ltd were regressed on weekly returns of Nifty 50.
Data Analysis: Regression equation for weekly returns of Maruti Suzuki India Ltd = -0.74+(-0.24) Weekly returns of Nifty 50. B-t-stat = -1.89, N = 47, R2 = 0.023, F = 1.08, P Value (Significance F) = 0.30.
The above equations show the relationship between Nifty 50 and the Maruti Suzuki India Ltd. The Negative sign before the Co-efficient (-0.24) of Nifty 50 tells us that there is the negative relationship if Nifty decreases by 1 unit, then the Maruti Suzuki India Ltd will also decreases and wise versa. Figures in Bracket is t-stat for beta which is -1.89 and P value for which is 0.30 which is greater than 0.05 meaning the overall model is not statistically significant. N = 47, R2 = 0.023 which means 2.3%of Maruti Suzuki India Ltd return are explained by Nifty 50. F = 1.08 and P Value for that is 0.30 which is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion: Maruti Suzuki India Ltd is not good for investment.