Title: Relationship between Nifty 50 and Polycab India Limited.
Author: Priyanka Sampat Prajapat.
Introduction:
Polycab India Limited is one of India’s leading manufacturers of wires, cables, and fast-moving electrical goods (FMEG). Established in 1964, the company has a strong presence in both domestic and international markets. It offers a wide range of products including power cables, switches, fans, and lighting solutions. Polycab is known for its wide distribution network and focus on quality and innovation.
Objective:
To calculate Beta and observe its significance.
Literature Review:
1.Patel (2021) analyzed performance appraisal practices at Polycab India Pvt. Ltd., highlighting their role in enhancing employee motivation and productivity. Structured appraisal systems improved efficiency, strengthened goal alignment, and contributed to better organizational performance in the manufacturing sector.
2.Malik (2022) evaluated the financial performance of Polycab India Ltd., emphasizing consistent revenue growth, strong operating margins, and expansion into FMEG products. Efficient cost management and pricing strategies supported profitability, while commodity price fluctuations and competition remained key challenges.
Data Collection:
Data for Nifty 50 and Polycab India Ltd. was downloaded from nseindia.com for the period 1-1-25 to 31-12-25. The data was manipulated to get Friday Closing Prices of Nifty 50 and Polycab India Ltd . Weekly Returns were calculated. Weekly Returns of Nifty 50 were named as X and Weekly Returns of Polycab India Ltd were named as Y. Then Y was regressed on X.
Data Analysis:
Equation:
Y = a + bx
a = Intercept
b = Beta
a = 0.304518237
b = 1.690298335
The Regression Equation:
Y = 0.304518237 + 1.690298335x
Description:
The regression equation obtained from the analysis shows the relationship between NIFTY returns (X) and the company returns (Y) of Polycab India Limited. The coefficient of X (Beta) is 1.6902, which is positive. This indicates that there is a direct relationship between the NIFTY returns and the company returns. This means that when the market return increases, the company return also tends to increase, and vice versa.
The value of beta (1.6902) indicates that for every 1 unit increase in NIFTY return, the company return increases by approximately 1.6902 units. Since the beta value is greater than 1, it shows that the company is more volatile and riskier than the market, and its movements are larger than overall market movements.
The intercept value is 0.3045, which represents the expected return of the company when the NIFTY return is zero.
The p-value for Beta is 0.00012, which is less than 0.05. This indicates that the model is statistically significant, and the relationship between NIFTY returns and company returns is meaningful.
Conclusion:
Beta is more than 1, Invest in this company for short term if Nifty rises.
Reference:
Malik, V. (2022). Fundamental analysis of Polycab India Ltd. Dr. Vijay Malik Research.
Patel, R. (2021). Impact of performance appraisal on employees: A study of Polycab India Pvt. Ltd. International Journal of Advanced Engineering and Management.