RELATIONSHIP OF POLYCAB INDIA WITH NIFTY 50
Author – Pranali Singh
INTRODUCTION
Polycab India Limited is a leading Indian electrical solutions company that designs, manufactures, and supplies a wide range of electrical products. With a rich history spanning over five decades, Polycab has established itself as one of the largest and most trusted cable and wire manufacturers in India. Founded in 1968 in Mumbai, Polycab began its journey as a small cable manufacturing unit. Over the years, the company expanded its product portfolio, diversified into new markets, and established a strong presence across India.
OBJECTIVE
To find out Beta of Polycab India ltd and its significance.
DATA COLLECTION
The data of Nifty 50 and the data for Polycab India ltd was downloaded from 01-05-2023 to 30-04-2024 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and Polycab India ltd. Weekly return was calculated by the formula (Yt+1 – Yt)/Yt*100.
Weekly returns of the Nifty 50 were taken as X
Equity of Polycab India ltd was taken as Y.
Y was regressed on X.
DATA ANALYSIS
Weekly return of Polycab India Ltd. is 0.82
Weekly return of Nifty 50 is 0.81
(t stat is β which is 0.872)
The above Equation shows the relationship between Nifty 50 and Polycab India Ltd. Positive sign before the co-efficient of Nifty 50 tells us that there is a positive relationship. If Nifty rises by 1 unit your company will rise by 0.90. Figures in brackets is t stats for Beta and P value for which is 0.387 which is less than 0.5 meaning that the Beta is statistically significant.
No of observations are 49.
R2 is 0.80 which means 80% of the company’s return are explained by Nifty 50.
F=192.93 and the P value for that is 0.387 which is less than 0.05 meaning overall model is statistically significant at 5% level.
CONCLUSION
β< 1 and positive (less than 1) means good for long term investment