Relationship of NIFTY50 with Apollo Tyres Ltd

 

Introduction  

Founded in 1972, Apollo Tire Ltd is a renowned international tire manufacturer headquartered in Gurugram, India with a global presence in over 100 countries. The company operates seven state-of-the-art factories – five in India, one in the Netherlands and one in Hungary – producing a wide range of tires for passenger cars, SUVs, trucks, buses, two-wheelers, agricultural machinery and SUVs under its flagship brands Apollo and Vredestein. Since opening its first factory in Perambra, Kerala, Apollo has focused on innovation, sustainability, and a strong distribution network. The company, which has over 20,000 employees, has reported revenues of over Rs 25,000 crore in the past few financial years due to its strong leadership in the domestic market and growing international presence. Apollo Tires invests heavily in research and development, with a focus on environmentally friendly technologies such as low rolling resistance tires that meet global emissions standards.

 

Objective

To determine the Beta (β) of Apollo Tyres Ltd and observe its significance.

 

Literature Review

1. Competitive Strategy, Global Expansion & Financial Performance in Indian Tyre Firms

Singh & Verma (2021) investigated the impact of global expansion, efficiency, and product portfolio diversification on the financial performance of the Indian tire manufacturing sector. The study notes that Apollo Tires is leveraging overseas acquisitions (Dunlop Africa and Vredestein Netherlands) and investments in advanced radial tire technology to expand its international market share. An export-focused strategy, brand repositioning and capacity expansion contributed to the revenue growth despite fluctuations in domestic demand. The authors argue that vertical manufacturing integration, a strong dealer network, and brand differentiation are key factors for Apollo’s competitive advantage and sustainable profitability.

2. Sustainability, Supply Chain Digitization & Innovation Capabilities in Tyre Manufacturing

Kumar & Desai (2023) investigated the impact of sustainability practices and digital transformation on operational efficiency in the Indian auto tire industry. The study shows that Apollo Tire’s adoption of carbon reduction, sustainable rubber and factory automation initiatives improves resource efficiency, improves supply chain transparency and builds stakeholder trust. The authors highlight that innovation in green tire compounds, investment in R&D, and digital supply networks provide long-term competitiveness, especially in the face of rising ESG expectations from OEM partners and regulators.

 

Data Collection 

Historical Data of Apollo tyres Ltd. and NIFTY50 index data was downloaded from NSE website for the period 01-12 -2024 to 31-11-2025. The data was manipulated to find out the Friday closing prices. Nifty50 was represented as x and Apollo Tyres Ltd as y. A linear regression analysis was performed where y was regressed on x.

 

Data Analysis 

The equation is EQUITY = 0.33035 – 0.51445X(NIFTY50)

                                                                                  (1.42)

Number of Observations (N) = 47, F = 32.3339, R Square = 0.418108

 

Interpretation 

The above equation shows the relationship between NIFTY50 and Equity. Equity is a dependent variable and NIFTY50 is an independent variable. Negative sign means there is inverse relationship between equity and NIFTY50 meaning if NIFTY50 rises, equity falls and if NIFTY50 falls equity rises. If NIFTY50 rises by 1 rupee, equity will fall by 0.51445 units. Figure in bracket () is t-stat and the p value for this is 0.00000091 which is less than 0.05 meaning NIFTY50 is statistically significant at 5% level. Number of observations are 47, r2 = 0.4181 which means 41.81%% of equity is explained by NIFTY50, balance 58.19%% is the error model. F= 32.3339 and the p value or the significance value is 0.00000091 which is less than 0.05 which means overall the model is statistically significant at 5% level.

 

Conclusion

The beta value is −0.51445, which is negative and less than 1 in magnitude, meaning it should be avoided for investment.

References

1. Singh, R., & Verma, A. (2021). Global Expansion Strategies and Financial Performance: Evidence from India’s Tyre Manufacturing Sector. International Journal of Industrial Business & Finance, 18(2), 112–124.

2. Kumar, S., & Desai, P. (2023). Sustainable Manufacturing and Digital Supply Networks: A Study of India’s Tyre Industry. Journal of Sustainable Operations & Supply Chain Systems, 11(1), 44–59.