Title: Relationship of Deepak Nitrite Ltd. with Nifty 50
Author: Dushyant Mundra
Introduction: Deepak Nitrite is a leading chemical manufacturing company in India, specializing in organic, inorganic, and fine chemicals used across various industries like pharmaceuticals, agrochemicals, and dyes. The company has a strong global presence, offering a wide range of industrial and specialty chemicals. The total number of equity shares is 13,64,26,886 with a face value of ₹2 each. The symbol of the Deepak Nitrite share is DEEPAKNTR.
Objective: To find out Beta of Deepak Nitrite and its significance.
Data Collection: Data of Deepak Nitrite and Nifty 50 was downloaded from 01/06/23 to 31/05/24 taken from NSE, then data is manipulated to get Friday closing prices.
Weekly returns of Nifty 50 were taken as X and weekly return of Deepak Nitrite is taken as Y, then weekly returns of both were calculated, Weekly return of Deepak Nitrite was regressed on weekly returns of Nifty 50.
Data Analysis:
Regression Equation = -0.085+0.03
N= 49
R2 = 0.017
F = 0.83
P-value = 0.36
Interpretation: The above equation shows the relationship between weekly return of RVNL and weekly return of Nifty50. The + sign before the coefficient of Nifty50 tells that if Nifty50 rises your company will also rise and vice versa .If Nifty50 rises by 1 unit ,company will rise by 0.90 unit.
0.91(T stat per β) P value of which is 0.36 which is less than 0.5 meaning β is statistically significant at 5 % level.
R^2 = 0.17 meaning 17% of companies return is explained by Nifty50, the remaining 83% is fundamental F is 0.82 and P Value is 0.188 that means DATA IS STATISTICALLY SIGNIFICANT
Conclusion: 1) If β is more than 1 and Nifty50 is at low, invest for short term
2) If β is less than 1 and Nifty50 at high, invest for long run.
3) If β is negative, avoid it.