Title: Relationship of HFCL company with Nifty 50.
Author: Harshita Dharmadhikari
Introduction: HFCL Limited (Himachal Futuristic Communications Limited) is an Indian telecommunications company that specializes in providing a range of communication equipment and solutions. HFCL is involved in manufacturing optical fiber cables, telecom equipment, and networking products. The company has diversified into various sectors, including broadband, smart cities, and surveillance systems, and has been instrumental in supporting India’s digital infrastructure initiatives. HFCL also focuses on research and development to innovate and enhance its product offerings.
Objective: To find out Beta of HFCL Company & its Significance.
Data Collection: Data for Nifty50 & HFCL Company was downloaded from NSE website, from period 1st June 2023 to 30st May 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: . Weekly returns of HFCL Company were regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of HFCL Company= -0.26906- -0.68773 Weekly returns of Nifty 50 (-1.559)
N = 47, R2 = 0.004016, F = 0.185499, P-value = 0.668
The above equation shows the relationship between Nifty 50 & HFCL Company. The negative sign before the coefficient of weekly returns of Nifty 50 means there is negative relationship. If Nifty 50 rise by 1unit, HFCL Company will decrease by 0.26 & vice versa. The Coefficient of Nifty 50 has t stat = (-0.4307) & the P value of which is 0.668 which is greater than 0.05 meaning Beta is not statistically significant at 5% level and N=47, No of observations are 47. R2 is 0.004 which means 5% of Weekly returns of HFCL Company are explained by Nifty 50. 95% depends upon other factors like financial results, market trends and other factors. F is 0.185499 & the P value of this is 0.668 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is negative (-0.26), avoid this investment.