{"id":21155,"date":"2024-10-10T07:12:57","date_gmt":"2024-10-10T01:42:57","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=21155"},"modified":"2024-10-10T07:12:57","modified_gmt":"2024-10-10T01:42:57","slug":"the-relationship-between-avenue-supermarts-ltd-and-the-nifty-50","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=21155","title":{"rendered":"The relationship between Avenue Supermarts Ltd. and the Nifty 50."},"content":{"rendered":"

Title:<\/u><\/strong>\u00a0The relationship between Avenue Supermarts Ltd. and the Nifty 50.<\/p>\n

Author:<\/u><\/strong>\u00a0Adhyayan Brahmwar<\/p>\n

Introduction:<\/u><\/strong><\/p>\n

Avenue Supermarts Ltd., founded by\u00a0Radhakishan\u00a0Damani in 2002, is the parent company of D-Mart, a retail chain known for offering a wide range of products at competitive prices. The company\u2019s unique model for owning its stores helps control costs and maintain profitability.<\/p>\n

Since its IPO in 2017, Avenue Supermarts\u2019 stock has demonstrated strong growth, backed by solid financial performance and expansion. However, high valuations and increasing competition from e-commerce players present risks for investors tracking the stock\u2019s performance.<\/p>\n

Objective:<\/u><\/strong>\u00a0To determine the beta of Avenue Supermarts Ltd. and its significance.<\/p>\n

Data collection:<\/u><\/strong><\/p>\n

Data for Avenue Supermarts Ltd. and the Nifty 50 from 1st<\/sup>\u00a0May 2023 to 30th<\/sup>\u00a0April 2024 was collected from the NSE website and then manipulated to obtain Friday closing prices and weekly returns. The weekly returns of the Nifty 50 were taken as the independent variable (x), and the weekly returns of Avenue Supermarts Ltd. were taken as dependent variable (y). The weekly returns of Avenue Supermarts Ltd. were then regressed on the weekly returns of the Nifty 50.<\/p>\n

Data analysis:<\/u><\/strong><\/p>\n

The equation below depicts the relationship between the weekly returns of Avenue Supermarts Ltd. and the weekly returns of the Nifty 50:<\/p>\n

Weekly return of Avenue Supermarts Ltd. = 0.18+1.36 (weekly return of Nifty 50) (t-stat = 3.55)<\/strong><\/p>\n

N = 49, R2<\/sup>\u00a0= 0.21, F = 12.61, P-value = 0.001<\/strong><\/p>\n

The positive sign before the coefficient of the Nifty 50 indicates that if the Nifty 50 rises, Avenue Supermarts Ltd. also rises, and vice versa. Specifically, if the Nifty 50 increases by one unit, the weekly return of Avenue Supermarts Ltd. is expected to rise by 1.36 units.<\/p>\n

The figure in brackets represents the t-statistic for the beta coefficient, which has a corresponding p-value of 0.001. Since this p- value is less than 0.05, the beta coefficient is statistically significant at the 5% level.<\/p>\n

R2\u00a0<\/sup>= 0.21, meaning that 21% of the variability in Avenue Supermarts Ltd.\u2019s returns\u00a0is\u00a0explained by the Nifty 50. The remaining 79% might be due to company-specific factors, such as fundamentals.<\/p>\n

The F-statistic is 12.61, with a p-value of 0.001, which suggests that the overall model is statistically significant.<\/p>\n

Conclusion:<\/u><\/strong><\/p>\n

Since the beta is 1.36 (greater than 1) and the Nifty is currently low, the company appears to be a good option for short-term investment. \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Title:\u00a0The relationship between Avenue Supermarts Ltd. and the Nifty 50. Author:\u00a0Adhyayan Brahmwar Introduction: Avenue Supermarts Ltd., founded by\u00a0Radhakishan\u00a0Damani in 2002, is the parent company of D-Mart, a retail chain known for offering a wide range of products at competitive prices. The company\u2019s unique model for owning its stores helps control costs and maintain profitability. Since… Continue reading The relationship between Avenue Supermarts Ltd. and the Nifty 50.<\/span><\/a><\/p>\n","protected":false},"author":139434,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[],"class_list":["post-21155","post","type-post","status-publish","format-standard","hentry","category-finance","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/21155","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\/139434"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=21155"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/21155\/revisions"}],"predecessor-version":[{"id":21156,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/21155\/revisions\/21156"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=21155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=21155"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=21155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}