Relationship of Vardhman Textiles Limited with Nifty50
Author- Vidisha Varun
Introduction – Vardhman Textiles Ltd., formerly known as Mahavir Spinning Mills, is one of India’s leading textile manufacturers, known for its wide range of products, including yarn, fabrics, and garments. Established in 1965, the company has grown significantly and operates multiple manufacturing facilities across India. The current share price of Vardhman Textiles Ltd seen was Rs.463.20.
Objective – To find out Beta of Vardhman Textiles Limited and its significance.
Data Collection – Data of Nifty50 and Vardhman Textiles Ltd was downloaded from https://www.nseindia.com/ from 1st June 2023 to 30th May 2024. Weekly returns of Nifty50 which was denoted as “X” and weekly returns of Vardhman Textiles Ltd which was denoted as “Y” were calculated for Friday closing by the Formula: . Then, “Y” was regressed on “X”.
Data Analysis – Weekly returns of Vardhman Textiles Ltd. = -0.6+(0.19) (0.54)
N = 49, R2 = 0.006, F = 0.29, P-value = 0.58
Interpretation – The above equation shows the relationship between Nifty50 and weekly returns of Vardhman Textiles Ltd.
The positive sign before 0.193 means there is a positive relationship. The Coefficient of Nifty50 has t-stat = 0.54 and the P value is 0.58 which is more than 0.05 meaning, Beta is not statistically significant for Vardhman Textiles Ltd.
The number of observations is 49 (N=49), R square is 0.006, meaning 0.6% of Vardhman Textiles Ltd. prices are explained by Nifty. F value is 0.29 & P value is 0.58 meaning it is more than 0.05. This means that the overall model is not statistically significant.
Conclusion – Weekly returns Coefficient is 0.193 which is less than 1 so it is good for long-term investment.