Title:- Relationship of ACC Ltd with Nifty 50
Author:- Avadhut Rane (Roll No:- 021330024083)
Introduction:- ACC Ltd. (Associated Cement Companies Limited) is one of India’s leading cement producers, with a rich legacy dating back to 1936. Headquartered in Mumbai, ACC is known for its innovation, sustainability initiatives, and large-scale production capabilities. It offers a wide range of cement and concrete products, serving the construction industry across India. ACC operates numerous cement plants and has a significant market presence. In 2005, it became part of the Swiss cement giant Holcim (now Lafarge Holcim), further strengthening its position in the global market. The company emphasizes sustainable construction practices and is recognized for its eco-friendly initiatives.
Objective:- To find out the beta (β) of ACC Ltd and its significance.
Data Collection:- The data was collected by taking the weekly returns of NIFTY50 and ACC Ltd of dated time of 1 year from 1st May 2023 to 30th April 2024 with the help of nseindia.com.
Data was manipulated to find out Friday closing prices and weekly returns for both NIFTY50 and ACC Ltd. The weekly returns were calculated by the formula: [(Yt+1 – Yt)/Yt]*100. Weekly returns of NIFTY50 were considered as X and weekly returns of ACC Ltd were considered as Y, and Y was regressed on X.
Data Analysis:-
N = 48
R2 = 0.30
F = 19.37
P – Value = 6.35
The positive coefficient (1.7024) of the independent variable (NIFTY50 returns) means that as the NIFTY50’s weekly returns increase, ACC Ltd.’s weekly returns are also expected to increase. Specifically, for every 1% increase in NIFTY50 returns, ACC Ltd.’s returns are expected to increase by approximately 1.702%. The R-squared value (0.2963) suggests that around 29.63% of the variability in ACC Ltd.’s weekly returns can be explained by the variability in NIFTY50’s weekly returns. This is a moderate level of explanation, meaning that while NIFTY50 returns have a statistically significant impact on ACC Ltd, other factors not included in this model contribute to the remaining ~70% of the variability. The p-value (6.34856E-05) for the NIFTY50’s coefficient is very small, indicating that the relationship between NIFTY50 returns and ACC Ltd returns is statistically significant. This means the results are unlikely to be due to random chance and suggest a reliable correlation between these variables during the time period analysed. The intercept (0.0806) is not statistically significant (p-value = 0.878), meaning that when NIFTY50’s weekly return is zero.
Conclusion:- The Beta of ACC Ltd. is positive and greater than 1, which means the company is suitable for short term investment.