Title: Relationship of Praj Ltd with Nifty50
Author: Priyal Kadam
Introduction:
Praj Industries Limited is an Indian multinational process and project engineering company, headquartered in Pune, specializing in bio-based technologies and engineering with a focus on bioenergy, high purity water solutions, and critical process equipment, with a global presence in over 100 countries
Objective:
To find out the Beta of Praj Ltd and its significance.
Literature Review:
Consistency of F-Test and Applications
Asad Zaman (1997) examines the reliability of the F-test in statistical analysis. Although the abstract is not available, the title suggests a focus on assessing the conditions under which the F-test provides consistent results, which is crucial for validating models in econometrics and other quantitative fields. The study likely discusses theoretical aspects of the F-test’s consistency and explores practical applications where this statistical tool is employed
Scientific Management of Equipment in Medical Innovation Laboratory
Yongmei Wang, Fangxin Liu et al (2021) addresses the challenges associated with managing equipment in medical innovation laboratories. The authors propose enhancing equipment management systems through functional division, appointment registration, and strengthening management teams to support the development of innovation and entrepreneurship skills among undergraduates. Their findings indicate that such improvements lead to a significant increase in approved innovative experimental projects and the number of project groups the laboratory can accommodate simultaneously. Additionally, the utilization rate of laboratory equipment improved, and the vacancy rate decreased. The study concludes that effective instrument management can markedly enhance the efficiency of scientific research in innovation laboratories
Data Collection:
Praj Ltd and Nifty50 data was download from NSE website for the period 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices. Weekly returns were calculated by using the formula i.e. (New closing price – Old closing price)/Old closing price. Weekly return of Nifty50 was X and Weekly return of Praj Ltd was Y. Y was regressed on X.
Data Analysis:
Equation: Praj = -0.001 + 0.1150 (Nifty50) (-0.4489)
N= 47 R2= 0.14103 F= 7.3882
Interpretation: The above equation shows the relationship between Nifty50 and Praj Ltd share price. Praj Ltd share price is a dependent variable and Nifty50 is independent variable. Positive sign means there is a direct relationship between Praj Ltd share price and Nifty50 meaning if the Nifty50 rises the Praj Ltd. share price will also increase and vice versa. If Nifty50 rises by 1-rupee Praj Ltd share price will rise by 0.1150. Figure in bracket is t-Stat and p-value of these is 0.009 which is less than 0.05 meaning Nifty50 is statistically significant at 5% level. N is 47 meaning no. of observation are 47. R2 = 0.1410. Which means 14.10% of Praj Ltd share price is explain by Nifty50. Balance 85.9% is the error due to the variable which are not in the model. F = 7.3882 and the p-value is 0.6556 which is more than 0.05 which means overall the model is not statistically significant at 5% level.
Conclusion:
Praj Ltd beta is 0.11 indicates that it is less volatile than the market and better suited for long-term investment.
Reference:
Hendricks, Lutz, “undated”. “Equipment Investment and Growth In Developing Countries,” Working Papers 97/5, Arizona State University, Department of Economics.
Yongmei Wang & Fangxin Liu & Xiaoyu Li, 2021. “Scientific Management of Equipment in Medical Innovation Laboratory,” Scientific Review, Academic Research Publishing Group.