{"id":23156,"date":"2025-12-20T11:39:47","date_gmt":"2025-12-20T06:09:47","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=23156"},"modified":"2025-12-20T11:39:47","modified_gmt":"2025-12-20T06:09:47","slug":"relationship-of-nifty-50-with-polycab","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23156","title":{"rendered":"Relationship of nifty 50 with Polycab"},"content":{"rendered":"

A DETAILED STUDY ON THE RELATIONSHIP BETWEEN<\/span><\/span>
<\/span><\/span>NIFTY 50 AND POLYCAB INDIA LIMITED<\/span><\/span><\/p>\n

Course: MBA \u2013 Finance<\/span><\/span><\/p>\n

Subject: Research Methodology<\/span><\/span><\/p>\n

Academic Year: 2024\u201325<\/span><\/span>
<\/span><\/span><\/p>\n

1. Introduction<\/span><\/span><\/p>\n

Polycab India Limited is one of India\u2019s leading manufacturers of wires, cables, and fast-moving electrical goods (FMEG). The company plays a critical role in India\u2019s infrastructure and housing growth story. From an investor\u2019s perspective, it is essential to understand how Polycab\u2019s stock behaves in relation to the overall market.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>The NIFTY 50 index represents the performance of the top 50 companies listed on the National Stock Exchange (NSE). By analyzing the relationship between Polycab India Limited and the NIFTY 50 index, investors can assess the level of systematic risk associated with the stock. This study applies the Capital Asset Pricing Model (CAPM) to evaluate this relationship.<\/span><\/span><\/p>\n

2. Need for the Study<\/span><\/span><\/p>\n

The need for this study arises due to the increasing importance of risk analysis in equity investment decisions. While returns are important, understanding risk exposure is equally critical. Manufacturing and electrical goods companies like Polycab may be influenced by both macroeconomic factors and firm-specific variables such as demand cycles, raw material prices, and infrastructure spending.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>This study helps investors determine whether Polycab behaves as an aggressive or defensive stock and whether it offers diversification benefits when included in a portfolio.<\/span><\/span><\/p>\n

3. Objectives of the Study<\/span><\/span><\/p>\n

The primary objectives of the study are:<\/span><\/span>
<\/span><\/span>\u2022 To analyze the relationship between Polycab India Limited and the NIFTY 50 index.<\/span><\/span>
<\/span><\/span>\u2022 To calculate the Beta of Polycab India Limited using CAPM.<\/span><\/span>
<\/span><\/span>\u2022 To test the statistical significance of market influence on Polycab\u2019s returns.<\/span><\/span>
<\/span><\/span>\u2022 To evaluate the diversification potential of Polycab stock.<\/span><\/span><\/p>\n

4. Scope of the Study<\/span><\/span><\/p>\n

The scope of the study is confined to weekly stock returns of Polycab India Limited and the NIFTY 50 index. The analysis covers a period from December 2024 to November 2025. The study focuses only on systematic risk and does not include fundamental analysis or valuation metrics.<\/span><\/span><\/p>\n

5. Literature Review<\/span><\/span><\/p>\n

Sharpe (1964) introduced the Capital Asset Pricing Model (CAPM), which establishes a linear relationship between expected return and systematic risk. According to CAPM, investors are compensated only for systematic risk, as unsystematic risk can be eliminated through diversification.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>Beta measures the sensitivity of a stock\u2019s returns to market movements. R-squared explains how much of the variation in stock returns is explained by market returns, while Alpha measures abnormal returns earned over the benchmark.<\/span><\/span><\/p>\n

6. Data Collection<\/span><\/span><\/p>\n

The study is based on secondary data collected from the National Stock Exchange (NSE). Weekly closing prices were used to compute weekly returns.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>\u2022 Dependent Variable (Y): Polycab India Limited returns<\/span><\/span>
<\/span><\/span>\u2022 Independent Variable (X): NIFTY 50 returns<\/span><\/span>
<\/span><\/span>\u2022 Number of Observations: 51<\/span><\/span>
<\/span><\/span>\u2022 Data Frequency: Weekly<\/span><\/span><\/p>\n

7. Research Methodology<\/span><\/span><\/p>\n

A quantitative research design was adopted for this study. Weekly returns were calculated using the percentage change method. Simple linear regression was applied using the CAPM equation:<\/span><\/span>
<\/span><\/span>
<\/span><\/span>Ri = \u03b1 + \u03b2Rm + \u03b5<\/span><\/span>
<\/span><\/span>
<\/span><\/span>Where Ri represents the return of Polycab India Limited and Rm represents the return of the NIFTY 50 index.<\/span><\/span><\/p>\n

8. Regression Results<\/span><\/span><\/p>\n

The regression analysis produced the following results:<\/span><\/span>
<\/span><\/span>
<\/span><\/span>\u2022 Beta (\u03b2): 0.1790<\/span><\/span>
<\/span><\/span>\u2022 Alpha (\u03b1): -0.0764<\/span><\/span>
<\/span><\/span>\u2022 R-Squared (R\u00b2): 0.2073<\/span><\/span>
<\/span><\/span>\u2022 P-Value: 0.000789<\/span><\/span>
<\/span><\/span><\/p>\n

9. Regression Equation<\/span><\/span><\/p>\n

Polycab Returns = -0.0764 + 0.1790 (NIFTY 50 Returns)<\/span><\/span><\/p>\n

10. Interpretation of Results<\/span><\/span><\/p>\n

The beta value of 0.18 indicates that Polycab India Limited is a highly defensive stock. This means that the stock is far less sensitive to market fluctuations compared to the NIFTY 50.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>The R-squared value of 0.21 suggests that only about 20.7% of the variation in Polycab\u2019s returns is explained by market movements. This highlights the dominance of company-specific factors such as business expansion, infrastructure demand, and operational efficiency.<\/span><\/span>
<\/span><\/span>
<\/span><\/span>The p-value of 0.000789, which is less than 0.05, confirms that the relationship between Polycab returns and market returns is statistically significant.<\/span><\/span><\/p>\n

11. Findings of the Study<\/span><\/span><\/p>\n

\u2022 Polycab India Limited exhibits strong defensive characteristics.<\/span><\/span>
<\/span><\/span>\u2022 The stock has low exposure to systematic market risk.<\/span><\/span>
<\/span><\/span>\u2022 Company-specific factors play a major role in determining returns.<\/span><\/span>
<\/span><\/span>\u2022 Polycab provides effective diversification benefits.<\/span><\/span><\/p>\n

12. Limitations of the Study<\/span><\/span><\/p>\n

\u2022 The study is limited to one-year data.<\/span><\/span>
<\/span><\/span>\u2022 Only systematic risk is analyzed.<\/span><\/span>
<\/span><\/span>\u2022 Macroeconomic variables are not included.<\/span><\/span>
<\/span><\/span>\u2022 Results may change with different time horizons.<\/span><\/span><\/p>\n

13. Conclusion<\/span><\/span><\/p>\n

The study concludes that Polycab India Limited is a defensive stock with very low sensitivity to market movements. Its low beta value and limited market dependence make it suitable for conservative investors and diversified portfolios. The findings emphasize the importance of sector-specific analysis in equity investment decisions.<\/span><\/span><\/p>\n

14. References<\/span><\/span><\/p>\n

Sharpe, W. F. (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. Journal of Finance.<\/span><\/span>
<\/span><\/span>Bodie, Z., Kane, A., & Marcus, A. J. (2021). Investments. McGraw-Hill Education.<\/span><\/span>
<\/span><\/span>Damodaran, A. (2012). Investment Valuation. Wiley.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

A DETAILED STUDY ON THE RELATIONSHIP BETWEENNIFTY 50 AND POLYCAB INDIA LIMITED Course: MBA \u2013 Finance Subject: Research Methodology Academic Year: 2024\u201325 1. Introduction Polycab India Limited is one of India\u2019s leading manufacturers of wires, cables, and fast-moving electrical goods (FMEG). The company plays a critical role in India\u2019s infrastructure and housing growth story. From… Continue reading Relationship of nifty 50 with Polycab<\/span><\/a><\/p>\n","protected":false},"author":139942,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23156","post","type-post","status-publish","format-standard","hentry","category-uncategorized","entry"],"_links":{"self":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23156","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\/139942"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23156"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23156\/revisions"}],"predecessor-version":[{"id":23157,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23156\/revisions\/23157"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23156"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}