Author name: HARDIK KAMBLE
INTRODUCTION: –
Hindustan Petroleum Corporation Limited (HPCL) is a leading oil and gas company in India, established in 1974. It is a public sector undertaking (PSU) and operates in the refining, marketing, and distribution of petroleum products. HPCL is one of the key players in India’s energy sector, contributing to the country’s energy security and economic development. Headquartered in Mumbai, Maharashtra, HPCL is owned by the Government of India and is listed on major stock exchanges such as the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The company is known for its focus on high-quality products, sustainable business practices, and expanding its market reach both domestically and internationally.
Objective:
To determine the beta value of Hindustan Petroleum Corporation Limited relative to the Nifty 50 index and assess its statistical significance.
Literature Review:
This study examines the financial performance of Hindustan Petroleum Corporation Limited: – (HPCL) using various financial tools and ratio analysis techniques. The analysis includes liquidity ratios (current ratio, liquid ratio, and absolute ratio), profitability ratios (gross profit ratio, net profit ratio, operating profit ratio, and operating ratio), and working capital analysis. The study is based on secondary data collected over five years, from 2014-15 to 2018-19. The findings suggest that HPCL’s financial performance has improved, but there are areas for improvement in liquidity and asset management. (Ahmad, I. 2016)
Analysis of Financial Performance of Hindustan Petroleum Corporation Limited: –
This study analyzes the financial performance of Hindustan Petroleum Corporation Limited (HPCL) using various financial tools and ratio analysis techniques. The analysis includes liquidity ratios (current ratio, liquid ratio, and absolute ratio), profitability ratios (gross profit ratio, net profit ratio, operating profit ratio, and operating ratio), and working capital analysis. The study is based on secondary data collected over five years, from 2014-15 to 2018-19. The findings suggest that HPCL’s financial performance has improved, but there are areas for improvement in liquidity and asset management. (Kali Muthu, M., & Jaiswal,2020)
Regression equation Y=(a+bX) that is
Hindustan Petroleum Corporation Limited = (0.0000264+1.3537888 Nifty50)
Data Collection:
Data for Hindustan Petroleum Corporation 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 Axis Bank Limited as Y. A linear regression analysis was performed where Y was regressed on X.
Data Analysis: Hindustan Petroleum Corporation Ltd. (HPCL) Share Price vs. Nifty 50
The regression equation describes the relationship between the Nifty 50 (X) and the Hindustan Petroleum Corporation Ltd. (HPCL) share price (Y). Indicating that the HPCL share price is the dependent variable, while the Nifty 50 is the independent variable. The positive coefficient of 1.353788871 suggests that for every 1% increase in the Nifty 50’s weekly return, HPCL’s weekly share price is expected to increase by approximately 1.35%. With 47 observations, the model’s R-squared value is 0.085782218, implying that approximately 8.58% of the variation in HPCL’s weekly share price returns can be explained by changes in the Nifty 50’s weekly returns, while the remaining 91.42% is attributed to other factors not included in the model. The p-value for the slope is 0.045726688, which is less than the conventional threshold of 0.05, indicating that the relationship between the Nifty 50’s weekly returns and HPCL’s weekly share price returns is statistically significant at the 5% level. Consequently, this model provides evidence of a statistically significant linear relationship between the Nifty 50’s weekly returns and HPCL’s weekly share price returns, suggesting that market movements have a meaningful impact on the company’s share price returns, although the impact is relatively small compared to other potential influencing factors.
Conclusion: Hindustan Petroleum Corporation Ltd. (HPCL)
Since the beta (1.353788871) is more than 1, it indicates that Hindustan Petroleum Corporation Ltd. (HPCL) is good for short-term investment.
Reference:
Ahmad, I. (2016). Analysis of Financial Performance of Hindustan Petroleum Corporation Limited. International Journal of Research in Management, Economics and Commerce, 6(04), 214-227.
Kali Muthu, M., & Jaiswal, P. (2020). A Study on Financial Performance Analysis of Hindustan Petroleum Corporation Limited. EPRA International Journal of Research and Development (IJRD), 5(11), 260-266.