Author – Mosami kumbhare – 23
Introduction – This study examines the relationship between the performance of the Nifty Fifty index and the stock returns of Marico pvt. Ltd. The objective is to analyze how movements in the overall market influence the returns of Marico. For this purpose, secondary data on daily or monthly returns of both Nifty Fifty and Marico is collected and analyzed using regression analysis. The methodology helps estimate the beta value and determine the extent to which market fluctuations affect the company’s stock performance.
Objective – Calculation of beta and observe its significance
Literature Review –
William F. Sharpe (1964) explained through the Capital Asset Pricing Model that the expected return of a stock depends on its systematic risk (beta) in relation to market movements.
Eugene F. Fama and Kenneth R. French (1992) found that beta alone cannot explain stock returns completely and suggested that other factors like firm size and book-to-market ratio also affect stock performance.
Data Collection –
Data for Nifty 50 and Marico Ltd was downloaded by Nseindia.com for the period 1/1/2025 to 31/12/2025 Friday closing price for Nifty 50 and Marico Ltd were calculated. Weekly returns of Nifty 50 were taken as X and Weekly return of Marico Ltd were taken as Y. Y was regressed on X.
Data Analysis –
Y = 0.1434 + 0.3953X
N = 48 R Square = 0.0836 F = 4.196
P = 0.0462 B = 0.3953 T-Stat = 2.048
The above equation shows the relationship between NSE and Marico. The positive beta value indicates a direct relationship, which means if NSE stock rises, Marico stock also rises and vice versa. If NSE increases by 1 unit, the Marico stock increases by 0.3953 units.The number of observations is 48. The T-stat value for beta is 2.048. The p-value is 0.0462, which is less than 0.05, meaning beta is statistically significant at the 5% level. The R square value is 0.0836, which means 8.36% of the variation in Marico stock is explained by NSE, and the remaining variation is due to other factors not included in the model. The F value is 4.196 and the p-value is 0.0462, indicating that the overall model is statistically significant.
Conclusion –
Since β < 1, the relationship is positive but weak. Therefore, it is not very strong for investment decisions, and other factors should also be considered before investing in Marico stock.
Reference –
Fama, E. F., & French, K. R. (1992). The cross-section of expected stock returns. Journal of Finance, 47(2), 427–465.
Sharpe, W. F. (1964). Capital asset prices: A theory of market equilibrium under conditions of risk. Journal of Finance, 19(3), 425–442