Title: Relationship of Ambuja Cement with Nifty 50
Author: Ayush Jain
Introduction: Ambuja Cements Limited is a leading cement manufacturing company in India, specializing in producing high-quality cement used in construction projects across the country. The company has a strong presence both domestically and internationally, known for its eco-friendly and sustainable production practices. Incorporated in 1981, Ambuja Cements has a market capitalization of ₹86,000 crore. Over the past 52 weeks, its share price has ranged from ₹340 to ₹600. The company’s book value is ₹148 per share, and it currently pays a dividend. Ambuja Cements has a return on capital employed (ROCE) of 18.2% and a return on equity (ROE) of 13.5%.
Objective: To Find Out Beta of Ambuja Cement & its significance
Data Collection: Data for Nifty50 & Ambuja Cement was downloaded from NSE website, further period 1st April 2023 to 31st March 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: Weekly returns of Ambuja Cement was regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of Ambuja Cement = -0.90+ 0.11(0.28)
N = 49, R2 = 0.001, F = 0.07, P-value = 0.77
The above equation shows the relationship between Niffty50 & Ambuja Cement. The Positive sign before 0.1178 means if Nifty raises Ambuja Cement also raises & vice versa. The Coefficient of Nifty50 has t stat = (0.2822) & the P value of which is 0.7790 which is more than 0.05 meaning nifty 50 is not statistically significant to increase the Prices of Ambuja Cement. To increase the prices of Ambuja Cement, R2 is 0.0016 meaning of 0.16% of Ambuja Cement prices explained by Nifty50. 99.84% dependents upon other factors like fundamentals are other factors. F is 0.0796 & the P value of this is 0.7790 meaning it is more than 0.05 meaning the overall all model is not statistically significant.
Conclusion: Weekly return of Coefficient is 0.1178 which is less than 1 so it is good for long term investment.