Author: Ram Kumar Yadav
Introduction:
This research examines the relationship between the stock returns of Raymond Limited and the benchmark index NIFTY 50, with the objective of estimating and interpreting systematic risk through beta analysis. The study evaluates the extent to which Raymond Limited’s share price movements are influenced by overall market movements and whether the stock exhibits market-driven or firm-specific behavior. Using a regression-based Capital Asset Pricing Model (CAPM) framework, the analysis measures the strength, direction, and statistical significance of the relationship between Raymond Limited’s returns and the NIFTY 50 index. The findings provide insights into the risk-return characteristics of Raymond Limited and its suitability as an investment option relative to broader market performance.
Objectives:
• To calculate the beta of Raymond Limited
• To analyze the significance of beta in relation to NIFTY 50
Literature Review:
View 1: V. L. Govindarajan, U. Parthiban, V. Balu (2020)
Financial Performance of Nifty 50 Automobile Companies in India – An Empirical Comparative Analysis
The study is based on secondary data collected from annual reports and financial websites such as Moneycontrol and BSE for a ten-year period from 2009–10 to 2018–19. The research analyses the financial performance of selected NIFTY 50 companies using Edward Altman’s Z-score and DuPont analysis of Internal Growth Rate (IGR) and Sustainable Growth Rate (SGR). Various profitability, liquidity, and per-share ratios were used as independent variables. Statistical tools such as descriptive statistics, correlation analysis, Friedman test, and coefficient of determination were applied. The findings emphasize the importance of firm-specific financial ratios in explaining company performance rather than relying solely on market indicators.
View 2: Mr. Pushkar Dilip Parulekar (2015)
DuPont Analysis for Selected Five NIFTY Fifty Companies
This study focuses on return on equity (ROE) as a measure of shareholder wealth maximization and decomposes it using the DuPont model into Net Profit Margin, Asset Turnover Ratio, and Equity Multiplier. The research examines five NIFTY 50 companies, including Raymond Limited, across different sectors of the Indian economy. Multiple regression analysis and ANOVA at a 95% confidence level were applied using audited financial statements from 2005 to 2014. The results indicate that operational efficiency and financial leverage significantly influence shareholder returns.
Data Collection:
The data for NIFTY 50 and Raymond Limited were collected from the official website of NSE India for the period 01-12-2024 to 30-11-2025. Friday closing prices were used to compute weekly returns.
Weekly returns were calculated using the formula:
Weekly Return = (Current Week Price − Previous Week Price) / Previous Week Price × 100
The weekly returns of NIFTY 50 were taken as the independent variable (X), while the weekly returns of Raymond Limited were taken as the dependent variable (Y). A simple linear regression analysis was conducted by regressing Y on X.
Data Analysis:
Raymond Limited Returns = 4.0190 + 1.0788 (NIFTY 50)
The above regression equation explains the relationship between the dependent variable (returns of Raymond Limited) and the independent variable (NIFTY 50 returns) using 46 weekly observations.
The coefficient of the independent variable (NIFTY 50) is 1.0788, indicating a positive but weak relationship between market returns and the returns of Raymond Limited. This suggests that a one-unit increase in NIFTY 50 returns leads to an average increase of approximately 1.08 units in Raymond Limited’s returns; however, the strength of this relationship is weak.
The p-value of 0.5264 for the NIFTY 50 coefficient is much higher than the 5% and 1% significance levels, indicating that the relationship is statistically insignificant. Hence, the null hypothesis cannot be rejected, and market returns do not significantly explain the returns of Raymond Limited during the study period.
The R² value of 0.0092 shows that only 0.92% of the variation in Raymond Limited’s returns is explained by changes in NIFTY 50 returns. This indicates that nearly 99% of the variation in returns is driven by firm-specific factors such as business restructuring, demergers, operational performance, sectoral trends, and management decisions.
Further, the F-statistic of 0.41 with a Significance F value of 0.5264 confirms that the overall regression model is statistically insignificant, suggesting that NIFTY 50 returns fail to explain the movements in Raymond Limited’s equity returns during the study period.
Conclusion:
The regression analysis reveals that there is no statistically significant relationship between the returns of Raymond Limited and the NIFTY 50 index. Although the estimated beta coefficient is positive, it is weak and statistically insignificant, indicating that Raymond Limited’s stock returns do not meaningfully respond to overall market movements during the study period.
The extremely low R² value highlights that market movements explain only a negligible portion of the variation in Raymond Limited’s returns, emphasizing the dominant role of company-specific factors and corporate actions. Overall, Raymond Limited exhibits distinctive risk characteristics, making it suitable for investors seeking diversification benefits rather than direct exposure to general market movements represented by the NIFTY 50 index.
References:
Govindarajan, V. L., Parthiban, U., & Balu, V. (2020). Financial Performance of Nifty 50 Automobile Companies in India – An Empirical Comparative Analysis, Volume I, 2020.
Parulekar, P. D. (2015). DuPont Analysis for Selected Five NIFTY Fifty Companies, Vol. 2, 2015.