Author Name : Sanket Nichale
Introduction
Sharda Motor Industries Ltd. (SMIL) is a leading Indian automotive components manufacturer specializing in emissions, suspension, and NVH (Noise, Vibration, and Harshness) solutions. The company supplies exhaust systems, catalytic converters, and suspension components to major automobile manufacturers. Listed on the National Stock Exchange (NSE), SMIL plays a crucial role in India’s auto components industry, driving innovation and sustainability in vehicle manufacturing. The NIFTY50 index represents the performance of the top 50 companies in India, providing a benchmark for market trends and investor sentiment. This study explores the relationship between Sharda Motor Industries Ltd.’s stock performance and NIFTY50.
Objective
To findout the Beta value of Sharda Motors Induatry LTD. And it’s significance.
Literature review
The 1990 paper “A Note on the Indian Motor Vehicle” by Dixit R, Mathew Dilip, and G. Raghuram provides an overview of India’s motor vehicle industry, covering its structure, key players, and policy challenges. While it offers historical insights, the industry has evolved significantly since then. For a relevant analysis of Sharda Motor Industries, recent studies on the Indian auto-component sector, technological advancements, and market trends should be considered.
Data Collection
Data for Sharda Motor Industries 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 Sharda Motor Industries Limited as Y. A linear regression analysis was performed where Y was regressed on X.
Data Analysis
Equation: Sharda Motor Industries = 0.0093 – 0.1730Nifty50
Interpretation
The regression equation describes the relationship between Nifty50 (X) and Sharda Motor Industries share price (Y), indicating that Sharda Motor Industries share price is the dependent variable, and Nifty50 is the independent variable. The positive coefficient of -0.1730 suggests that for every one-unit increase in Nifty50, Sharda Motor Industries share price is expected to increase by 0.1730 units. With 47 observations (N=47), the model’s R-squared value: 0.0017, implying that approximately 0.17% of the variation in Sharda Motor Industries share price can be explained by changes in Nifty50, leaving 99.83% of the variation attributable to other factors not include in the model. The p-value for the slope is 0.7818, which is greater than the conventional threshold of 0.05, indicating that the relationship between Nifty50 and Sharda Motor Industries share price is not statistically significant at the 5% level. Consequently, this model does not provides strong evidence to suggest a significant linear relationship between Nifty50 and Sharda Motor Industries share price.
Conclusion
Sharda Motor Industries’ beta of -0.1730 is negative, meaning it moves inversely to the market, making it less volatile but not ideal for long-term investment.
Referances
Dixit R & Mathew Dilip & Raghuram, G., 1990. “A Note on the Indian Motor Vehicle,” IIMA Working Papers WP1990-12-01_00984, Indian Institute of Management Ahmedabad, Research and Publication Department.