Relationship of NIFTY with JSW Steel Limited

Author Name: Jay Gherwala

Introduction about JSW Steel Limited

JSW Steel Limited, a leading Indian multinational steel manufacturing company, is part of the JSW Group. Founded in 1982, it is one of the largest steel producers in India, with a significant global presence. The company focuses on innovation, sustainability, and technological advancements to meet the growing demand for high-quality steel. JSW Steel’s contributions are vital to the infrastructure and construction sectors across the globe.

Objective

The primary objective of this study is to determine the beta value of JSW Steel Limited in relation to the Nifty 50 index. Beta is a measure of the stock’s volatility compared to the market. This study will provide insights into how JSW Steel’s stock performs relative to market movements, helping investors make informed decisions.

Literature Review

1. A research study by Mehta and Patel (2023) explored the relationship between steel sector companies and the broader market. It concluded that steel companies often exhibit cyclical behavior, with their stock prices closely tied to commodity prices and global demand.

2. According to a market analysis by Business Standard (2024), JSW Steel’s stock performance was influenced by economic policies, trade regulations, and global steel prices. The report highlighted the stock’s moderate correlation with the Nifty 50 index, indicating sector-specific volatility.

Data Collection

Data for JSW Steel Limited and Nifty 50 was downloaded for the period from 1st January 2024 to 31st December 2024. The data was manipulated to calculate the Friday closing prices for both indices. The Nifty 50 was represented as X and JSW Steel Limited as Y. Subsequently, a linear regression analysis was performed where Y was regressed on X.

Data Analysis

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.08317
R Square	0.00692
Adjusted R Square	-0.01565
Standard Error	3.02162
Observations	46

ANOVA
	df	SS	MS	F	Significance F
Regression	1	2.79824	2.79824	0.30648	0.58265
Residual	44	401.72888	9.13020
Total	45	404.52712

	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%	Lower 95.0%	Upper 95.0%
Intercept	-0.19970	0.44769	-0.44606	0.65774	-1.10196	0.70257	-1.10196	0.70257
X Variable 1	-0.14700	0.26553	-0.55361	0.58265	-0.68213	0.38814	-0.68213	0.38814

Conclusion

Since the Beta (-0.147) is less than 1, it indicates that JSW Steel Limited is good for long-term investment.

References

1. Mehta, S., & Patel, R. (2023). Cyclical Trends in the Steel Sector and Their Market Impact. Journal of Economic Studies.

2. Business Standard. (2024). JSW Steel and Market Correlation: An Analytical Report.