TITLE: RELATIONSHIP OF JK Cement Ltd WITH NIFTY50
AUTHOR: Janhavi Wanare
INTRODUCTION: JK Cement Ltd
JK Cement Ltd. is a prominent Indian manufacturer of Grey and White Cement, established in 1975 with its first plant in Nimbahera, Rajasthan. The company boasts a Grey Cement capacity of 24 MnTPA, ranking among India’s top producers. It is also a leading global manufacturer of White Cement, with a capacity of 1.20 MnTPA and wall putty capacity of 1.2 MnTPA. JK White Cement is sold in 43 countries, supported by international subsidiaries in Fujairah and Africa.
As per the market data, JK Cement Ltd’s stock trades on the NSE and BSE, with share prices fluctuating around ₹4 ,743.80-4,801.00, reflecting its steady performance in the industry.
Object: To find out the beta (β) of JK Cement Ltd and its significance.
Data Collection: The data was collected by taking the weekly return of NSE (National Stock Exchange) , NIFTY50 and JK Cement 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) – Yt / Yt * 100
The weekly return of Nifty was taken as (X) in terms of company (JK Cement Ltd) as Y is taken. Y was regressed on X.
Data analysis: Regression equation; Y (Intercept)= JK Cement Ltd + NIFTY 50 (weekly return of nifty)
Relationship of Nifty 50 and JK Cement Ltd = 0.54+ 0.22+ 0.98{t-stat})
N = 48, = 0.027, F = 1.29, P(VALUE)= 0.33
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 (0.98) for beta, the p value for which is 0.33 which is greater than 0.05, meaning beta is not statistically significant.
N=48, R^2=0.027 which means 27% of Voltas Ltd are explained by Nifty 50. Other (73%) are variable not explained in model.
f= 1.29 and p value for that variable is 0.33, 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. An investment in Voltas Ltd is beneficial from a risk-return perspective.