Relationship of Nifty with Raymond.
Author: Rachit Naik.
Introduction to Raymond:
Raymond Limited, founded in 1925, is a leading Indian textile and apparel manufacturer known for its premium fabrics and men’s clothing. The company offers a wide range of products under brands like Raymond, Park Avenue, and ColorPlus. With a strong presence in both domestic and international markets, Raymond is committed to quality, innovation, and sustainability. This report provides an overview of the company’s performance and strategies in the competitive textile industry.
Objective:
The primary objective of this study is to determine the beta value of Raymond in relation the Nifty 50 index. Beta is a measure of the stocks volatility compared to the market. This study will provide insights into how Raymond stock performs relative to market movements, helping investors make informed decisions.
Literature Review:
· Raymond Co. explores its strategic growth, market positioning, and innovations within the textile and apparel industry. Studies highlight its transformation from a textile company to a diversified conglomerate (Singh, 2019), emphasizing its focus on quality and sustainability (R.K.Sharma & Sashi K. Gupta, 2021). Raymond’s brand management strategies, such as its premium offerings under brands like Raymond and Park Avenue, are often cited as key to its competitive advantage (Verma, 2020). Additionally, the company’s responses to evolving consumer trends and global market challenges are discussed in various reports (Kumar & Reddy, 2022).
· Raymond Co. underscores its significant role in the Indian textile and apparel industry, focusing on its strategic growth and brand evolution. Studies reveal that Raymond’s diversification into multiple sectors, including real estate and engineering, has helped strengthen its market presence (Patel & Sharma, 2020). The company’s emphasis on innovation, particularly through sustainable manufacturing processes, has been recognized as a key driver of its competitive advantage (Mishra, 2021). Additionally, research highlights Raymond’s adaptability in responding to global market trends and changing consumer behaviour, positioning it as a resilient leader in the industry (Saxena & Desai, 2019).
Data Collection:
Data for Raymond and Nifty50 was download for period 1-1-2024 to 31-12-2024 and data was manipulated to find out the Friday closing prices were calculated of Nifty50=X and Raymond =Y. Subsequently, a linear regression analysis was performed where Y was regressed on X.
Data Analysis:
The regression equation:Y = 2215.10 – 0.0112X
This describes the relationship between the Nifty 50 (X) and the Raymond Company Ltd share price (Y), indicating that Raymond Company Ltd share price is the dependent variable. The negative coefficient of -0.0112 suggests that for every unit increase in Nifty 50, the share price of Raymond Company Ltd is expected to decrease by 0.0112 units. With 46 observations (N = 46), the model’s R-squared value is 0.002, indicating that 0.2% of the variation in Raymond Company Ltd share price can be explained by changes in the Nifty 50. The remaining 99.8% is attributed to other factors not included in the model. The p-value for the slope is 0.781, which is greater than 0.05. This indicates that the relationship between the Nifty 50 and Raymond Company Ltd share price is not statistically significant at the 5% level. Hence, the model provides no strong evidence of a significant linear relationship between Nifty 50 and Raymond Company Ltd share price, suggesting that market movements have minimal or no meaningful impact on the company’s stock price.
Conclusion:
Since the Beta (-0.201) is less than 1, it indicates that Raymond is good for long-term investment.
References:
· Shashi K. Gupta and R.K. Sharma are co-authors of several books, including “Management Accounting” and “Financial Management Theory & Practice”
· Patel & Sharma, 2020. “Trend in Global Markets” and “How the consumer Behaviour Changes”.