Title: Relationship of Maruti Suzuki India Limited with Nifty 50
Author: Manas Deshmukh (Roll No- 11)
Kohinoor Business School
Introduction:
Maruti Suzuki India Limited is a leading automobile manufacturer in India. It’s Headquarters is located in New Delhi. Established in 1981, it is a subsidiary of Suzuki Motor Corporation, Japan. The company dominates the Indian passenger vehicle market, offering a wide range of fuel-efficient and affordable cars. It has few very popular cars in indian market like WagonR, Swift, Ertiga, Brezza. With a strong presence across urban and rural markets, Maruti Suzuki plays a vital role in India’s automotive sector. Its not just one of the key players as private car selling company but also it is one of the largest commercial car seller in India. As a key component of the Nifty 50 index, its stock performance is closely tied to broader market movements, making it a crucial indicator for investors.
Objective:
To find out Beta of the Maruti Suzuki India Limited Company.
Literature Review:
1.Automotive Sector’s Influence on Nifty 50
An article titled “Maruti Suzuki India rises Monday, outperforms market” discusses how the automotive sector, particularly companies like MSIL, significantly impacts the performance of India’s benchmark indexes, including the Nifty 50. The report notes that robust sales figures from MSIL and its peers have led to notable gains in the Nifty 50, underscoring the automotive industry’s pivotal role in driving market trends.
2.Maruti Suzuki’s Market Performance
An analysis by Top Stock Research provides an overview of MSIL’s financial health and stock performance. The report highlights MSIL’s consistent returns over one, three, and five-year periods, indicating its stability and resilience in the market. This performance reflects the company’s strong fundamentals and its influential role within the Nifty 50 index.
Data Collection:
For data collection, Maruti Suzuki India Limited and Nifty 50 data were downloaded from the NSE website for the period 01-01-2024 to 31-12-2024. The data was manipulated to extract the closing price, and weekly returns were calculated. Weekly returns of Nifty 50 were considered as ‘x’, and weekly returns of Maruti Suzuki were considered as ‘y’. Y was regressed on X.
Data Analysis:
Regression Statistics
Multiple R – 0.52749585 , R Square – 0.278250537, Adjusted R square – 0.26221166,
Standard Error– 724.9525721, Observations-47
ANOVA
| df | SS | MS | F | Significance F | |
| Regression | 1 | 9117614.918 | 9117614.918 | 17.348505 | 0.000138991 |
| Residual | 45 | 23650030.43 | 525556.2319 | ||
| Total | 46 | 32767645.35 |
| Coefficients | Standard Error | t Stat | P-value | Lower 95% | Upper 95% | Lower 95.0% | Upper 95.0% | |
| Intercept | 9262.762214 | 656.3637535 | 14.11223908 | 3.88944E-18 | 7940.777753 | 10584.74667 | 7940.777753 | 10584.74667 |
| X Variable 1 | 0.231644455 | 0.055614864 | 4.165153659 | 0.000138991 | 0.119630368 | 0.343658541 | 0.119630368 | 0.343658541 |
Equation:
Maruti Suzuki India Ltd = 5753.7381 + (0.2624) Nifty50
Interpretation:
The regression equation Maruti Suzuki India Limited (Y) = 5753.7381 + (0.2624) Nifty 50 (X) describes the relationship between Maruti Suzuki’s stock price (Y) and Nifty 50 (X). Here, Nifty 50 is the independent variable, while Maruti Suzuki’s stock price is the dependent variable.
The coefficient of 0.2624 suggests that for every (1) unit increase in Nifty 50, Maruti Suzuki’s stock price is expected to increase by 0.2624 units.
The R Square value of 0.1569 indicates that around 15.69% of the variation in Maruti Suzuki’s stock price can be explained by changes in Nifty 50.
The p-value (0.0053) is less than 0.05, indicating that the relationship between Nifty 50 and Maruti Suzuki’s stock price is statistically significant.
Conclusion:
The Beta of 0.2624 indicates that Maruti Suzuki’s stock moves in the same direction as the market but with low sensitivity. This means the stock is less volatile compared to the overall market, making it relatively stable in a fluctuating economy and suitable for long term investments.
References:
https://www.topstockresearch.com/rt/Stock/MARUTI/BirdsEyeView
