TITLE: Relations of AMD Industries LTD with Nifty 50
Author: Aryan Nikhare
Introduction:
AMD Industries Ltd. is a leading manufacturer of packaging articles for the soft drinks, beverages, water, beer, liquor, and pharmaceutical industries. The company is recognized as India’s only complete one-stop solution provider for the carbonated soft drink and beer industries, offering end-to-end packaging solutions.
Founded in 1958 as a trading company, AMD Industries has grown into India’s top beverage packaging company. It supplies high-quality finished products to multinational corporations (MNCs) like Coca-Cola, Pepsi, South African Breweries (SAB), United Breweries (UB), Dabur, Hindustan Unilever (HLL), Hamdard, and many large domestic beverage, pharmaceutical, and healthcare companies.
With decades of experience and a commitment to quality and innovation, AMD Industries remains a trusted partner for major brands in the packaging industry.
Objective:
To find out the Beta of AMD Industries Ltd and its significance in relation to Nifty 50 index.
Literature Review:
Inventory of Food Products and Beverages in Retail Food Stores
Goldsborough et all, (1960). This study provides a special tabulation of retail food inventory data collected during the 1957 Retail Food Inventory Survey, initially reported in Marketing Research Report No. 286. The data was gathered to assist the Office of Civil and Defence Mobilization in planning emergency feeding programs. The report estimates that U.S. retail food stores (excluding warehouses) held approximately 5.78 billion pounds of food and beverages in inventory on a spring day in 1957. Key findings indicate that canned, preserved, and frozen foods were the largest category, comprising 31% of the total inventory, followed by beverages at 16%. The most stocked items in each food group included fresh and frozen beef (meat), fluid milk (dairy), canned soups (preserved foods), enriched flour (grain), cookies (bread products), candy (confections), carbonated soft drinks (beverages), canned pet food and coffee (miscellaneous), and oranges and potatoes (fresh produce).
The report presents detailed tables classifying inventory data based on food groups and individual items, aligned as closely as possible with the 1954 Census of Manufactures.
Price discovery between carbonated soft drink manufacturers and retailers
Pei-Chun Lai et all, (2015). This study explores the application of two machine learning algorithms—PC and Linear Non-Gaussian Acyclic Models (LiNGAM)—to determine causal relationships among retail prices, manufacturer prices, and the number of packages sold. Using scanner data from carbonated soft drink sales in the Chicago area, the analysis reveals that the PC algorithm cannot determine directional causality among the variables. In contrast, the LiNGAM algorithm successfully establishes causal directions, indicating that retail price influences both manufacturer price and quantity sold.
The report presents detailed tables classifying inventory data based on food groups and individual items, aligned as closely as possible with the 1954 Census of Manufactures.
Data Collection:
AMD Industries Ltd and Nifty 50 data was downloaded for a period of 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices were calculated of Nifty 50=X and AMD INDUSTRIES LTD = Y, Y was regression on X.
Data Analysis:
Regression Equation: Y = 0.00783 + 1.34065(X)
Key Regression values:
Intercept: 0.00783
Slope(Beta): 1.34065
R-squared: 0.1424 (14.24%)
P-value for X variable: 0.02128
F-statistic: 5.81434
Significance F: 0.02128
Interpretation:
Regression Equation: Y=0.00783+1.34065(X)
Slope (1.34): AMD Industries Ltd. moves 1.34 times more than Nifty 50.
Strength of Relationship:
R-squared = 14.24% → Nifty 50 explains only a small part of AMD Industries Ltd.’s stock price movement.
The remaining 85.76% of the stock price variation is due to other factors, such as company-specific news, industry trends, investor sentiment, or macroeconomic factors.
Statistical Significance:
P-value (0.02128) & F-stat (5.81434) confirm that Nifty 50 impacts AMD’s stock price significantly.
Volatility (Beta = 1.34):
AMD Industries Ltd. is more volatile than Nifty 50.
Conclusion:
AMD Industries Ltd. and Nifty 50 have a statistically significant positive relationship. AMD Industries Ltd.’s stock is more volatile than Nifty 50 (Beta>1). The model is not highly predictive (R² = 14.24%), indicating that other factors influence AMD Industries Ltd.’s stock price beyond Nifty 50. Investors should not rely solely on Nifty 50 movements to predict AMD Industries Ltd.’s stock price but should consider additional factors like sector trends, financial performance, and broader economic indicators.
Reference:
Goldsborough, George H. & Van Dress, Michael G., 1960. “Inventory of Food Products and Beverages in Retail Food Stores,” Marketing Research Reports 310889, United States Department of Agriculture, Agricultural Marketing Service, Transportation and Marketing Program.
Pei-Chun Lai & David A. Bessler, 2015. “Price discovery between carbonated soft drink manufacturers and retailers: A disaggregate analysis with PC and LiNGAM algorithms,” Journal of Applied Economics, Universidad del CEMA, vol. 18, pages 173-198, May.