Title: Relationship between Nifty50 and Paras defence and space technology ltd
Author –Pratham Kadam (72)
Introduction
Paras Defence and Space Technologies Ltd is an Indian company established in 2009 and headquartered in Navi Mumbai, specializing in advanced defence and space technology solutions. The company designs and manufactures products in areas such as defence electronics, optics, and heavy engineering systems, serving key organizations like DRDO and ISRO. It focuses on high-precision engineering and innovation to develop indigenous technologies. Through its operations, the company plays an important role in strengthening India’s defence capabilities. It also contributes to the government’s vision of Atmanirbhar Bharat by promoting self-reliance in critical sectors
Objective:- To calculate beta and find its significance
Literature Review:-
GDP Growth and Market Returns
The study finds a weak relationship between India’s GDP growth and stock market returns over 2008–2024 (Phalle et al., 2026). Macroeconomic factors such as inflation, the repo rate, and the exchange rate do not significantly explain short-term market movements (Phalle et al., 2026). Stock markets are influenced more by expectations, global cues, and policy changes, although long-term trends align with GDP (Phalle et al., 2026).
India’s Market Surge: Stability and Growth Drivers
Driven by political stability and a landmark $5 trillion market value milestone, India’s Nifty and Sensex indices are reaching record-breaking highs (Joshi, 2024). Growth is being specifically fueled by the government’s focus on defence indigenization and anticipated tax cuts for low-wage earners, which are expected to boost consumer goods consumption. Additionally, a thriving environment for block trades and strategic asset sales by companies like Paytm is helping firms recover and raise significant capital (Joshi, 2024).
Data Collection:-
data collection for Nifty 50 and Paras Defence and Space Technology Ltd was downloaded from nseIndia.com for period 1/1/2025 to 31/12/2025, the data was manipulated to get the Friday closing price of nifty 50 and Paras defence and space technology ltd weekly returns was calculated, weekly return of nifty fifty are name as X and weekly return of nifty 50 are name as Y, Y was regressed on X
Data Analysis:-
Y = 1.93 + 2.94X
N = 48, R² = 0.143, F = 7.68, t Stat = 2.77, P-value = 0.008
The regression equation indicates the relationship between Market Return (X) and Paras Defence and Space Technology Ltd. Return (Y). The R-Square value is 0.143, which means 14.3% of the variation in Paras Defence and Space Technology Ltd.’s return is explained by Market Return, while the remaining 85.7% is due to other factors not included in the model. The F value is 7.68 with a Significance F (p-value) of 0.008, which is less than 0.05. Hence, the overall regression model is statistically significant at the 5% level. The p-value of the coefficient for Market Return is 0.008, which is also less than 0.05. This indicates that Market Return has a statistically significant impact on Paras Defence and Space Technology Ltd.’s return. The intercept is 1.93, meaning that if the Market Return is 0, the return on Paras Defence and Space Technology Ltd. is expected to be 1.93%. The coefficient (beta) of Market Return is 2.94, which implies that for every 1 unit increase in Market Return, Paras Defence and Space Technology Ltd.’s return increases by 2.94 units.
Conclusion:-
Since the Beta for this company is 2.94, this stock is strictly a short-term play to be traded only when we expect the Nifty to rise.
References:-
Phalle, M., Patil, V., Wukkadada, B., Mohite, R. A., & Tike, M. R. (2026). Dynamics of GDP growth and stock market performance in India. Advances in Consumer Research.
Joshi, A. (2024, June 18). India’s stock market is experiencing a positive trend, with the Nifty and Sensex reaching new records due to expectations of political stability. Bloomberg.com.