Title: A Study on the Relationship between NIFTY 50 and AMBUJA CEMENT LIMITED
Author: Yash Surve
1. Introduction of the Company
Ambuja Cements Limited, a prominent member of the Adani Group, is one of India’s leading cement manufacturers. Established in 1981, the company has grown into a giant in the building materials industry, known for its sustainable practices and high-quality products like Ambuja Kawach and Ambuja Plus.
With a manufacturing capacity exceeding 100 MTPA (including its subsidiary ACC Limited), the company operates a massive pan-India network of integrated plants and grinding units. Ambuja Cements is a constituent of several major indices, including the NIFTY 100 and NIFTY 500, and plays a critical role in the “Nifty Infrastructure” and “Nifty Commodities” indices. As of late 2025, the company is undergoing a major consolidation, merging with ACC Limited and Orient Cement to create a unified “One Cement” platform.
2. Objective
The primary objective of this study is to calculate the financial and market parameters of Ambuja Cement Limited and observe its significance in relation to the broader market index, NIFTY 50. Specifically, the study aims to:
- Analyse the stock’s sensitivity (Beta) relative to NIFTY 50.
- Evaluate the financial performance (ROE, ROCE, and Profitability) for the fiscal year 2024–25.
- Assess how macroeconomic shifts reflected in the NIFTY 50 impact Ambuja’s market valuation.
3.Litrature Review
View 1: Literature emphasizes that profitability ratios are an effective tool for evaluating and comparing financial performance of manufacturing firms. Studies such as Nishanthini and Nimalathasan (2013) and Baskar (2019) reveal that profitability varies significantly across companies due to differences in cost control, operational efficiency, and management of non-operating items. These studies highlight that higher operating profits do not always lead to higher net profits, underscoring the importance of using multiple profitability ratios rather than relying on a single measure.
View 2: Literature focusing specifically on the cement industry, highlights that profitability performance differs widely among cement companies due to variations in scale, operational efficiency, cost structure, and market conditions. Studies by Tank and Dhadhal (2019) and Mayilsamy and Pradeep (2021) show significant differences in margins and return ratios across cement firms, emphasizing that effective utilization of resources and control over production and operating costs are critical determinants of profitability in this capital-intensive industry.
4. Data Collection
The data of Nifty 50 and the data for AMBUJA CEMENT was downloaded from 01-12-2024 to 30-11-2025 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and AMBUJA CEMENT , 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 ONGC was taken as Y. Y was regressed on X.
5. Data Analysis
Dependent Variable = 0.0041 − 0.0167 (X Variable 1)
The above regression equation explains the relationship between the dependent variable and the independent variable (X Variable 1) using 49 weekly observations.
The coefficient of X Variable 1 is negative (−0.0167), indicating a negative relationship
between the independent variable and the dependent outcome. This implies that a one
unit increase in X Variable 1 leads to an average decrease of approximately 0.0167 units
in the dependent variable, suggesting an inverse relationship between the two variables
The t-statistic for the coefficient is −4.23 with a p-value of 0.000108, which is well below the 1% and 5% levels of significance. This confirms that the coefficient is statistically significant, indicating that movements in X Variable 1 have a meaningful and reliable influence on the dependent variable.
The R-square value of 0.2755 shows that approximately 27.55% of the variation in the dependent variable is explained by changes in X Variable 1, reflecting a moderate explanatory power of the regression model. The F-statistic of 17.87 with a significance value of 0.000108 indicates that the overall regression model is statistically significant, confirming the presence of a strong linear relationship between the variables.
6. Conclusion
The regression results reveal an extremely weak and statistically insignificant relationship between the stock’s returns and the market index (X Variable 1). Although the estimated beta coefficient (β = 0.1287) is positive, its high p-value (0.6836) indicates that the relationship lacks statistical significance, and therefore no reliable inference can be drawn about the stock moving in tandem with overall market movements. The low beta further suggests minimal sensitivity to systematic market risk.
Moreover, the R² value of 0.0036 indicates that only 0.36% of the variation in the stock’s returns is explained by changes in the market index, highlighting the negligible explanatory power of the model. The insignificant F-statistic reinforces that the regression as a whole is not meaningful. In summary, the findings suggest that the stock’s return behaviour is largely independent of market fluctuations and is primarily influenced by firm-specific factors rather than broader market dynamics.
7. Reference
Tank, N., & Dhadhal, C. (2019). A study of profitability analysis of selected cement companies in India. Journal of Emerging Technologies and Innovative Research (JETIR), Volume 6, Issue 6, June 2019.
Mayilsamy, R., & Pradeep, S. (2021). A study on financial performance of UltraTech Cement Ltd. International Journal of Multidisciplinary Research (IJMR), Volume 7, Issue 7, July 2021.