Title : Relationship of Nifty50 with Asian Paints Limited
Author: Aastha Chavan
Introduction:
Asian Paints is one of India’s leading paint and coatings companies and a key player in the decorative paints segment. Established in 1942, the company has grown into a multinational brand with operations across Asia, the Middle East, Africa, and the South Pacific. Asian Paints offers a wide range of products including decorative paints, industrial coatings, waterproofing solutions, and home décor services. Known for its strong brand equity, extensive distribution network, and focus on innovation and customer-centric solutions, Asian Paints plays a significant role in the Indian manufacturing sector and reflects broader trends in construction, infrastructure, and consumer demand.
Objective:
Calculation of beta Asian Paints of and observe its significance
Literature Review:
View 1: Dr. Kshitija Gandhi(2018). Research Paper on Fundamental Analysis of Indian Paint Industry.
Fundamental analysis helps investors assess the true value of shares and make informed investment decisions by identifying whether stocks are over- or under-priced. This study follows a top-down approach, covering economic, industry, and company analysis. The Indian paint industry is growing rapidly, driven by product innovations such as eco-friendly, odor-free, and dust- and water-resistant paints, which have increased customer demand. Given its strong future outlook, the paint industry offers attractive investment potential. The study focuses on two leading NSE-listed companies—Asian Paints Ltd. and Berger Paints Ltd.—and is based on secondary data collected from RBI reports, NSE sources, and company annual reports over a five-year period. Fundamental analysis using the EIC approach is applied to estimate the intrinsic value of both companies
View 2: Sadhishkumar V (2024). Profit and Stock Prices Performance of Selected Listed Paint Companies.
This study examines whether the profits of selected paint companies influence their stock prices and identifies the best model to forecast stock prices for investment decisions. Using secondary monthly data from Moneycontrol and Yahoo Finance (March 2017–February 2022), the top three NSE-listed paint companies by market capitalization—Asian Paints, Berger Paints, and Akzo Nobel India—were analyzed. The results show noticeable price volatility across all three stocks, with Berger Paints showing more extreme price movements. Overall, the study finds no significant link between company profits and stock prices, and identifies the cubic regression model as the most suitable for forecasting stock prices in the paint industry.
Data Collection:
The data of Nifty 50 and the data for Asian Paints Limited was downloaded from 30-11-2024 to 30-11-2025 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and Asian Paints Limited. Weekly return was calculated by the formula (Yt+1-Yt)/Yt*100 and then weekly returns of the Nifty 50 was taken as X and the equity of Asian Paints Limited was taken as Y. Y was regressed on X.
Data Analysis:
The above regression equation explains the relationship between the dependent variable (stock returns) and the independent variable (NIFTY 50 index values) using 49 weekly observations.
• The coefficient of X Variable 1 is negative (−0.0681), indicating a negative relationship between the NIFTY 50 index and Asian Paints stock returns. This implies that a one-unit increase in the NIFTY 50 index leads to an average decrease of 0.0681 units in stock returns, suggesting an inverse movement between the stock and the market index.
• The t-statistic for the coefficient is −3.13 with a p-value of 0.00305, which is below both the 1% and 5% levels of significance. This confirms that the coefficient is statistically significant, indicating that changes in the NIFTY 50 index have a meaningful impact on Asian Paints’ stock returns.
• The R-square value of 0.175 shows that approximately 17.5% of the variation in stock returns is explained by movements in the NIFTY 50 index, indicating a moderate explanatory power of the regression model. The F-statistic of 9.78 with a Significance F value of 0.00305 confirms that the overall regression model is statistically significant.
Conclusion:
• The regression analysis indicates a statistically significant but negative relationship between Asian Paints’ stock returns and the market index (NIFTY 50). The estimated beta coefficient (β = −0.0681) is negative and significant, suggesting that the stock tends to move opposite to overall market movements.
• With an R² value of 0.175, a limited but meaningful portion of the variation in stock returns is explained by market movements, while the remaining variation is influenced by firm-specific factors. The significant F-statistic confirms the reliability of the model. Overall, Asian Paints exhibits partial market independence, behaving defensively rather than fully aligned with the broader market.
References:
· Dr. Kshitija Gandhi(2018). Research Paper on Fundamental Analysis of Indian Paint Industry. IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 20, Issue 3. Ver. XI (March. 2018).
Sadhishkumar V (2024). Profit and Stock Prices Performance of Selected Listed Paint Companies in India Stochastic Modeling & Applications Vol. 26 No. 3 pp. 29-35 (January-June, Special Issue 2022 Part 5).