Relation of Havells India Limited with Nifty 100
Author: Harsh Shinde
Introduction:
Havells India Limited is a leading Fast Moving Electrical Goods (FMEG) company with a strong global presence. Founded in 1958, Havells is known for manufacturing a diverse range of electrical products, including cables, lighting, home appliances, and switchgear. The company has established a strong brand reputation through continuous innovation, superior quality, and an extensive distribution network. Havells has also expanded its operations through strategic acquisitions, such as Lloyd, to diversify its consumer offerings. With a robust focus on sustainability and energy efficiency, Havells continues to play a significant role in India’s electrical industry.
Objective:
To find out the Beta of Havells India Limited and its significance.
Literature Review:
Impact of Electrical Manufacturing on Market Performance
Gupta, Raj et al. (2021) discuss how electrical manufacturing firms contribute to stock market performance. The study highlights that companies in this sector experience market fluctuations due to technological advancements, raw material costs, and government policies. It further analyzes the impact of electrical sector performance on major indices like Nifty 100, suggesting a moderate correlation with market trends.
Role of Consumer Durables in Economic Growth
Sharma, Priya (2019) explores the relationship between the consumer durables sector and economic growth. The study employs econometric models to assess how companies like Havells, which cater to consumer needs through home appliances and electrical products, influence GDP growth. Findings indicate that strong financial performance in the consumer durables sector is linked to positive economic trends, making firms like Havells crucial for market stability.
Data Collection:
Havells India Limited and Nifty 100 data were downloaded for the period 1-1-24 to 31-12-24. The Friday closing prices were calculated for Nifty 100 = X and Havells India Limited = Y. A regression analysis was conducted where Y was regressed on X.
Data Analysis:
Equation: Havells India = 2.415 + 1.278 Nifty 100
Interpretation: The regression equation shows the relationship between Nifty 100 (X) and Havells India share price (Y). The positive coefficient of 1.278 suggests that for every unit increase in Nifty 100, the Havells India share price is expected to increase by 1.278 units. With 46 observations (N = 46), the R^2 value is 0.1123, meaning that approximately 11.23% of the variation in Havells India’s share price can be explained by changes in Nifty 100. The F-value for the model is 5.62. The p-value for the slope is 0.0287, which is less than 0.05, indicating statistical significance at the 5% level. This model confirms a significant linear relationship between Nifty 100 and Havells India’s share price.
Conclusion:
Havells India Limited’s beta of 1.28 suggests that it is moderately volatile compared to the market. This indicates that it could be a stable investment option with growth potential in alignment with market trends.
Reference:
Gupta, Raj et al., 2021. “Impact of Electrical Manufacturing on Market Performance,” Journal of Market Analysis, Vol. 14(3), pp. 120-135.
Sharma, Priya, 2019. “Role of Consumer Durables in Economic Growth,” Economic Policy Review, Vol. 8(1), pp. 45-63.