Author : Aman pal
F4 2024-26- 021330124041,ITM Business School,
Kharghar, Maharashtra, India
Introduction: Ambuja Cement is a major Indian cement company that was founded in 1983 by Narotam Sekhsaria and Suresh Neotia. The company is known for its high-quality, high-strength Ordinary Portland Cement (OPC) and Pozzolana Portland Cement (PPC) Ambuja Cement has developed technology to produce consistent quality cement from a variety of raw materials
Objective : To find out the Beta of Ambuja cement LTD and its significance with respect to Nifty 50.
Data Collection : The data for Nifty 50 and Ambuja Cement LTD was downloaded from official site of NSE for the period 1st June 2023 to 31st May 2024. Data was manipulated to get Friday closing prices and weekly returns of Nifty 50 and Ambuja cement LTD was calculated using the formula (Yt+1 – Yt) / Yt * 100 and then Y was regressed on X. Here Y is Weekly returns of Ambuja Cement LTD and X is weekly returns of Nifty 50.
Data Analysis : Weekly Returns of Ambuja Cement LTD = -0.78+0.20 Weekly Returns of Nifty 50
(-0.579)
N = 48
R² = 0.005
F = 0.268
P-value = 0.178
t-Stat = -1.366
Interpretation : The above equation shows the relationship between Nifty 50 and Ambuja Cement LTD . The positive sign before the coefficient of weekly returns of Nifty 50 means there is a positive relationship, if Nifty 50 rises by 1 unit then Ambuja Cement LTD also rises by (-0.78) and vice versa. The coefficient of Nifty 50 has t-Stat = (-1.366), the P-value of which is 0.178, which is Greater than 0.05 meaning Beta is not statistically significant at 5% level and N=48, No of observations are 48. R2 is 0.005 which means 5% of Weekly returns of Ambuja Cement LTD are explained by Nifty 50. 95% depends upon other factors like financial results, market trends and other factors. F is 0.268 & the P value of this is 0.178 meaning it is more than 0.05 meaning the overall model is not statistically significant at 5% level.
Conclusion: Beta is negative (-0.78), avoid this investment