Author: Krishi Pandey(93)
Introduction
Kalyan Jewellers India Limited is one of the leading jewellery retail companies in India. The company was founded in 1993 and is headquartered in Thrissur, Kerala. Kalyan Jewellers operates a large network of jewellery showrooms across India and the Middle East and offers a wide range of products including gold jewellery, diamond jewellery and other ornaments.
The company has built a strong reputation for trust, transparency and quality assurance in jewellery retailing. As a publicly listed company, the performance of Kalyan Jewellers’ stock is influenced by movements in the overall stock market.
This report analyses the stock performance of Kalyan Jewellers India Limited and its sensitivity to the broader market index Nifty 50.
Objective
To calculate Beta and observe its significance.
Literature Review
1. Capital Asset Pricing Model
William F. Sharpe (1964) explains that Beta is a measure of the systematic risk of a security relative to the overall market. It indicates how sensitive a stock’s return is to the movement of the market index. A beta greater than 1 means the stock is more volatile than the market, while a beta less than 1 indicates that the stock is relatively less volatile. Therefore, beta is widely used by investors and researchers to analyse the relationship between individual stocks and market indices such as Nifty 50.
2. Stock Market Risk and Return
Eugene F. Fama and Kenneth R. French (1992) explain that although Beta is an important measure of systematic risk, other factors such as company size, financial structure and market conditions also influence stock returns. Their study suggests that analysing stock returns requires considering multiple factors that affect risk and performance in the stock market. These insights help investors understand the behaviour of individual stocks relative to the broader market.
Data Collection
Data for Nifty 50 and Kalyan Jewellers India Limited was downloaded from nseindia.com for the period 1/1/2025 to 31/12/2025.
Friday closing prices of Nifty 50 and Kalyan Jewellers were calculated.Weekly returns of Nifty 50 were taken as X and weekly returns of Kalyan Jewellers were taken as Y.
Y was regressed on X.
Data Analysis
Regression Equation
Y = -0.58 + 0.94X
Variable Value
N 48
R Square 0.28
F 18.67
P Value 0.00012
T Stat 4.32
Beta (B) 0.94
The above equation shows the relationship between Nifty 50 and Kalyan Jewellers India Limited. The Beta value is 0.94, which indicates that the stock moves almost in line with the market. If the Nifty 50 increases by 1 unit, the return of Kalyan Jewellers increases by approximately 0.94 units.
The number of observations is 48. The t-statistic for beta is 4.32, which indicates that the coefficient is statistically significant. The P value is 0.00012, which is less than 0.05, showing that the relationship between the market return and stock return is statistically significant. The R square value is 0.28, which means that 28% of the variation in Kalyan Jewellers return is explained by market return, while the remaining variation is due to other factors not included in the model.
Conclusion
B < 1, Hence the stock moves slightly less volatile than the market and can be considered relatively stable compared to Nifty 50.
References
1) Sharpe, W. F. (1964). Capital Asset Pricing: A Theory of Market Equilibrium. Journal of Finance.
https://doi.org/10.2307/2977928
2) Fama, E. F., & French, K. R. (1992). The Cross-Section of Expected Stock Returns. Journal of Finance.
https://doi.org/10.1111/j.1540-6261.1992.tb04398.x