Relationship between Nifty50 and Aether Industries Limited
Author: Aniket Prakash Magar-86
Introduction:
Aether Industries Limited is a specialty chemical manufacturing company based in India, specializing in the development and manufacturing of advanced intermediates and specialty chemicals. The company has been growing exponentially over the years, especially after its establishment in 2013, based on its strong research and development activities, complex chemistry, and high-end niche products. This report aims to study the interrelation between the NIFTY 50 and the stock price movement of Aether Industries Limited to understand the sensitivity of the company’s stock.
Objective:
To calculate Beta and observe its significance.
Literature review:
1) Aether Industries: Temporary Setbacks but Strong Long-Term Growth Outlook.
In the update released on Aether Industries in August 2024, the firm faced a tough FY24 with a fire incident, shutdown of the plant, low demand globally, and pressure on prices from Chinese companies. However, the firm is looking to grow over the long term with capacity expansion at locations 3+, 3++, and 5, along with high investment in R&D activities, which almost doubled during the year. Aether is also looking to expand into high-growth businesses such as oilfield chemicals with Baker Hughes, lithium-ion battery additives, CO2-based polyols with Saudi Aramco, and plastic recycling. These activities will help the firm to experience a sharp recovery with 43% CAGR in revenue and 58% CAGR in earnings over the next three years from FY24 to FY27, thereby maintaining the BUY rating with a target price of ₹1,117.
2) Aether Industries: Performance Analysis and Outlook.
Aether Industries is a specialty chemicals company with a focus on complex and niche products used in the pharma, agrochemicals, material science, coatings, and oil and gas segments. Innovation and strong R&D capabilities are critical for Aether to sustain its competitive edge.
Data collection:
Data for Nifty 50 and Aether industries limited was downloaded by nseindia.com for the period 1/1/2025 to 31/12/2025. Friday closing price for Nifty 50 and Aether industries limited were calculated. Weekly returns of Nifty 50 were taken as x and Weekly return of Aether industries limited were taken as y. y was regressed on x.
Data Analysis:
The regression analysis shows that the model has very weak prediction capability and is unable to explain the relationship between the variables. From the regression analysis, it is clear that the value of Multiple R is 0.11. This shows a very low level of positive correlation between the independent and dependent variables. Moreover, the R Square value is 0.01. This shows that only 1% of the variation in the dependent variable is explained by the independent variable. However, the remaining 99% of the variation is due to factors that have not been considered in the study. Furthermore, the Adjusted R Square value is –0.01. This shows that the model is performing poorly compared to the average value. Moreover, it shows that the independent variable may not be relevant for the prediction. In addition, the standard error value of 1.75 shows a significant level of variation between the actual and predicted value. In the regression analysis, the sample size of 48 is considered sufficient. Thus, the low level of prediction capability of the model is probably because of the weak relationship between the independent variable.
Conclusion:
The beta value of 0.04 indicates that Aether industries limited is a low-beta stock with low sensitivity to market movements. Although the relationship with the market is statistically significant, the low R Square value suggests that company-specific factors have a greater influence on stock performance. Therefore, the stock can be considered relatively stable compared to high-beta stocks.
References:
HDFC Securities (2024). Aether Industries – Company Update, August 2024.
Progressive Shares (2025). Aether Industries Ltd – Result Review Q2FY26.