Title: Relationship of Tata Consultancy Services with Nifty 50
Author: Ms. Trupti Naresh Pawar
Introduction: Tata Consultancy Services (TCS) is one of the largest global IT services, consulting, and business solutions providers, headquartered in Mumbai, India. It operates in over 46 countries and serves clients across industries such as finance, healthcare, manufacturing, and retail. Known for its innovative solutions, TCS focuses on cloud computing, AI, cybersecurity, and digital transformation. It is a key subsidiary of the Tata Group, contributing significantly to its revenues. TCS is also known for its employee-friendly culture, ranked among the top employers globally.
Objective: To find out Beta of TCS and its significance.
Data Collection: Data of TCS and Nifty 50 for the period from 1.06.2023 to 30.05.2024 is taken from NSE website. Data was manipulated to find out Friday closing prices and weekly returns for both Nifty 50 and TCS. The weekly returns of Nifty 50 are denoted as X and the weekly returns of TCS were denoted as Y. after calculation Y was regressed on X. I calculated weekly returns as (Yt+1 – Yt)/Y*100.
Data Analysis:
Weekly return of TCS = 0.41+0.15 weekly return of Nifty (1.874)
N = 47, R Square = 0.07, F = 3.51, P-value = 0.067317
Interpretation:
- The above equation shows the relationship between weekly returns of Nifty 50 and TCS. The positive sign before co-efficient of weekly return of Nifty means there is positive relationship if Nifty raises by 1unit TCS raises by 0.15 unit and vice-versa.
- t- start for Beta 1.874 and P-value 0.067317 is more than 0.05 meaning beta is not statistically significant at 5% level.
- N = 47 (Number of observation)
- R- Square = 0.072 means 7 % of weekly return of TCS are explained by Nifty.
- F = 3.51 and P-value = 0. 067317 meaning overall the model is not statistically significant @ 5% level.
Conclusion: As company beta is more than 1 so investment should be for short term.