AUTHOR: SIDDHANT KAMBLE
INTRODUCTION: SHRIRAM FINANCE
Established in 1974, Shriram Group has been a key player in the Indian financial services sector. Core strength of the group lies in the financial services as the pioneers in truck financing and chit business.
Shriram Finance has a market capitalization of ₹1,25,503 Cr as of October 5, 2024. For detailed financial results, recent data shows that the revenue for the quarter ending December 31, 2023, was ₹8,92,730 Lakhs with a profit of ₹1,81,833 Lakhs, resulting in a profit margin of 48.42%. Please check current stock price and other specifics from reliable financial news sources for the latest updates..
Objective: To find out the beta (β) Shriram Finance and its significance.
Data Collection: The data was collected by taking the weekly return of NSE (National Stock Exchange) , NIFTY50 and Shriram Finance of dated time period 1st June 2023 to 30th May 2024 with the help of the NSE site. Friday’s closing price and weekly return were calculated by formula.
The weekly return of Nifty was taken as (X) in terms of company (Shriram Finance) as Y is taken. Y was regressed on X.
Data analysis: Weekly return of Shriram Finance = -0.71 +(-0.40) Weekly returns of Nifty 50 (T Stat:- -1.099)
N = 49, R2 = 0.0157, F =0.752, P-value = 0.277
The above equation shows the relationship between Nifty 50 & Shriram Finance Company. The negative sign before the coefficient of weekly returns of Nifty 50 means there is negative relationship. If Nifty 50 rise by 1unit, Shriram Finance Company will decrease by 0.40 & vice versa. The Coefficient of Nifty 50 has t stat = (-1.099) & the P value of which is 0.277 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=49, No of observations are 49. R2 is 0.015 meaning 15% Shriram Finance prices are explained by Nifty50. 85% dependents upon other factors like fundamentals are other factors. F is 0.75 & the P value of this is 0.277 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: As per the given data of Relationship Shriram Finance Ltd. With nifty 50 . We know that the coefficient (-0.30) is negative, avoid this company for further investment..