TITLE: RELATIONSHIP OF VOLTAS LTD WITH NIFTY50
AUTHOR: Vaishnavi Patil
INTRODUCTION: Voltas LTD
Voltas Limited, established in 1954 and part of the Tata Group, is a prominent Indian multinational company known for its quality products and extensive range of services. With operations in over 100 countries, Voltas is trusted for its sensible pricing and customer satisfaction. The company has launched Voltas Beko home appliances in collaboration with Beko of Arçelik Group, focusing on innovative design and technology to meet modern consumer needs.
As per the market data, ‘Voltas Ltd.’s stock trades on the NSE and BSE, with share prices fluctuating around Rs1,787.35 – Rs1809.6, reflecting its steady performance in the industry.
Object: To find out the beta (β) of Voltas Ltd and its significance.
Data Collection:
The data was collected by taking the weekly return of NSE (National Stock Exchange), NIFTY50 and Voltas Ltd of dated time period of 1 year from 1st May 2023 to 30th April 2024 with the help of the NSE site, Friday’s closing price and weekly return were calculated by formula.
Y(t+1) – t1 / Yt * 100
The weekly return of Nifty was termed as (X) in terms of company (Voltas Ltd) as Y. Y was regressed on X.
Data analysis:
Regression equation; Y (Intercept)= Voltas Ltd + NIFTY 50 (weekly return of nifty)
Relationship of Nifty 50 and Voltas Ltd = 0.92 + 0.22+ 1.63 {t-stat})
N = 48, = 0.026, F = 1.21, P(VALUE)= 0.11
The above equation shows the relationship between Nifty 50 and Voltas Ltd, positive sign before the co-efficient of Nifty 50 tells us that there is a positive relationship. If Nifty rise by 1unit, Company will rise by 0.22 and vice versa.
As the co-efficient of t stats as (1.63) for beta, the p value for which is 0.11 which is greater than 0.05, meaning beta is not statistically significant.
N=48, =0.026 which means 26% of Voltas Ltd are explained by Nifty 50. Other (74%) are variable not explained in model.
f= 1.21 and p value for that variable is 0.11, which is more than 0.05 meaning overall model is not statistically significant at 5% level.
Conclusion:
According to the analysis of Voltas Ltd’s Relationship with NIFTY 50, a beta value of < 1 indicates that the company exhibits lower volatility compared to the market. This characteristic suggests that Voltas Ltd may be a favorable option for long-term investment, as it tends to be more stable during market fluctuations. Consequently, an investment in Voltas Ltd is deemed beneficial from a risk-return perspective.