INTRODUCTION
\nPidilite Industries Limited is an Indian adhesives manufacturing company.[3] It manufactures products which can be segmented into consumer products: art materials and stationary; food and fabric care; car products and adhesives and sealants; and specialty industrial products: industrial adhesives; industrial pigments; industrial and textile resins, leather chemicals, construction chemicals and other industrial chemicals
\nAs of March\u201922 Pidilite has a market cap of $16.81 Billion. This makes Pidilite the world’s 1065th most valuable company by market cap according to our data. The market capitalization, commonly called market cap, is the total market value of a publicly traded company’s outstanding shares and is commonly used to measure how much a company is worth.<\/p>\n
OBJECTIVE
\nTo calculate beta of the company and find its significance<\/p>\n
VIEWS by ICICI DIRECT
\nQ3FY22 Results:
\nRevenue came in better than our estimates but EBITDA margin pressure continues due to high raw material prices
\n\u2022 Revenues were up 24% YoY to ~| 2851 crore (up 9% QoQ)
\n\u2022 Gross margin fell 1117 bps YoY leading to fall in EBITDA margin by 19%
\n\u2022 PAT declined ~20% YoY to | 359 crore
\nWhat should investors do?
\n Pidilite\u2019s share price has grown by ~3.5x over the past five years (from ~| 675 in February 2017 to ~| 2461 levels in January 2022).
\n\u2022 We maintain our HOLD rating on the stock Target Price and Valuation: We value Pidilite at | 2640, 75x P\/E of FY24E EPS Key triggers for future price performance:
\n \u2022 The management is targeting the \u2018core segment\u2019 (i.e. adhesive, sealants) and \u2018the growth\u2019 segment to grow at 1-2x and 2-4x of GDP, respectively, in the long term
\n \u2022 Revival in the real estate business will be a key demand driver for C&B segment, going forward
\n\u2022 Addition of premium products in the portfolio such as Araldite, cost optimization measures will help drive EBITDA margin of the company.<\/p>\n
DATA COLLECTION
\nData of index and equity were collected from https:\/\/www1.nseindia.com\/ and https:\/\/www.nseindia.com\/ respectively. Daily returns from 1st March-2021 to 28 Feb-2022 were downloaded in excel format from these websites and it was sorted into weekly format. Then weekly returns were calculated for both index and equity and then regression analysis was done.<\/p>\n
DATA ANALYSIS
\nPredicted Y = -1081.43016+ 0.2012128X
\nN=47,
\nR Square= 0.8141132,
\n F= 197.08293
\nT-stat (beta) = 14.0386228388623
\nT-stat (0.05,45)= 2.0141<\/p>\n
The above regression equation tells us the relationship between X and Y. Where X is NIFTY\u2019s weekly returns and Y is Pidilite Industries Ltd\u2019s weekly returns.
\nThe positive sign of Beta tells us the that there is a positive relationship between NIFTY and Pidilite Industries Ltd\u2019s weekly returns.
\nFrom the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.2012128 units.
\nT calculated is more that T tabulated which means, \u03b2 is statistically significant at 5% confidence level.
\nR^2 is 0.8141132 which means 81% of Y (Pidilite Industries Ltd) is explained by X. And the balance is explained by error.
\nF is 197.08293 which is more than table value which means model is statistically significant at 5% level.<\/p>\n
CONCLUSION
\n\u03b2 is statistically significant in case of NIFTY and Pidilite Industries ltd. Also, it can be concluded that Reliance Industries ltd is a low beta share, since it is less than 1.<\/p>\n","protected":false},"excerpt":{"rendered":"
INTRODUCTION Pidilite Industries Limited is an Indian adhesives manufacturing company.[3] It manufactures products which can be segmented into consumer products: art materials and stationary; food and fabric care; car products and adhesives and sealants; and specialty industrial products: industrial adhesives; industrial pigments; industrial and textile resins, leather chemicals, construction chemicals and other industrial chemicals As… Continue reading Relationship between PIDILITE and NIFTY<\/span><\/a><\/p>\n","protected":false},"author":91946,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-15977","post","type-post","status-publish","format-standard","hentry","category-management","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/15977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/users\/91946"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15977"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/15977\/revisions"}],"predecessor-version":[{"id":16151,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/15977\/revisions\/16151"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15977"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}