Title: Relationship of Tata Consultancy Service with Nifty 50
Author: Tanmayee Khandekar
Introduction:
Tata Consultancy Services (TCS) is an Indian multinational technology company specializing in information technology services and consulting. Headquartered in Mumbai, it is a part of the Tata Group and operates in 150 locations across 46 countries. It is the second-largest Indian company by market capitalization.
Objective: To find out beta of TCS and its significance.
Data Collection:
The data collected of Tata Consultancy Service and nifty 50 downloaded from NSE website from 1st May 2023 to 30 April 2024. The data was manipulated to find Friday closing prices. The Weekly return of nifty was termed as “x” and TCS was termed as “y” by using. Weekly return formula= (Yt+1-Yt)/Yt *100 and then we Y regressed on X.
Data Analysis:
The regression equation of TCS is Y= 4.04 +(-0.001) X
(T stats = -0.91) N= 48 R square=0.017 F= 0.82 P value=0.36
The above equation shows relationship between nifty 50 and weekly return of TCS. Negative sign before coefficient tells us that there is negative relationship if nifty rises by one unit, TCS will fall by 0.001 unit and if it falls by 1 unit it rises by 0.001 unit.
This figure in bracket (-0.91) is t-stats for beta and p value for which is 0.36 which is more than 0.05 meaning beta is not statistically significantly.
N=48, R2=0.017 which means 1.7% of TCS return are explained by Nifty 50. Other 98.3% are not explained in the model.
F=0.82 and p value is 0.36, which is more than 0.05 meaning overall model is not statistically significant.
Conclusion:
According to the given data of TCS, its relationship with Nifty 50, we know that beta value is less than 1 and negative meaning company is not good for investment. Investment in this company is not beneficial.