Relationship of Voltas Limited with Nifty50
Author: Vishal Bharat Shinde
Introduction:
Voltas Ltd., a part of the renowned Tata Group, is a leading Indian multinational company founded in 1954. Specializing in air conditioning, refrigeration, and engineering solutions, Voltas is known for its wide range of products, including residential and commercial air conditioners, coolers, and refrigeration systems. The company also offers integrated engineering services in areas like HVAC (heating, ventilation, and air conditioning) and electro-mechanical projects. With a strong presence in both domestic and international markets, Voltas has built a reputation for innovation, quality, and sustainability, making it a trusted brand in the cooling solutions industry.
Objective:
To find out the Beta of Voltas Limited and its significance.
Literature Review:
The Role of the Home Appliance Industry in Economic Growth
(Sharma & Gupta,2023) reported based on research from IDEA.RECEP.AC, the home appliance sector plays a crucial role in economic development. The industry is driven by urbanization, rising disposable income, and increasing demand for energy-efficient solutions. The study highlights that companies like Voltas, which focus on innovative technology and sustainability, benefit from market expansion and customer preference shifts. Furthermore, the sector contributes significantly to employment and GDP growth.
Market Volatility in the Indian Consumer Electronics Sector
(Patel & Reddy 2022) reported recent studies indicate that the Indian consumer electronics and home appliances sector experiences fluctuations due to global supply chain disruptions, regulatory changes, and shifts in consumer demand. Research suggests that stock price movements in this sector are influenced by seasonality, macroeconomic policies, and inflation rates, making it important for investors to assess volatility before making investment decisions.
Data Collection:
Voltas Limited and Nifty50 data was downloaded from NSE India website for period from 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices. Where weekly returns of NIFTY 50 will be Y & Weekly returns of Voltas Limited will be X, Y regression on X.
Data Analysis:
Equation: Voltas Limited = 0.8942+1.7161 Nifty50
Interpretation: Model Significance: The regression model is statistically significant (F = 18.82, p < 0.0001), meaning the independent variable has a real impact on the dependent variable. Effect of X Variable 1: A 1-unit increase in X Variable 1 leads to a 1.716-unit increase in the dependent variable (p < 0.0001), confirming a strong positive relationship. Model Fit: The model explains 29.49% (R² = 0.2949) of the variation in the dependent variable, indicating moderate explanatory power. Intercept: Not statistically significant (p = 0.1788), meaning it does not add much predictive value.
Conclusion:
The beta coefficient (1.7161) indicates that for every 1-unit increase in the independent variable, the dependent variable increases by 1.7161 units.
References:
Sharma, R., & Gupta, A. (2023). The role of consumer electronics in economic growth: A study of emerging markets. Journal of Business & Economics, 15(4), 112-127.
Patel, V., & Reddy, S. (2022). Market volatility in Indian consumer goods sector: Trends and implications. Indian Journal of Financial Studies, 9(3), 45-62.