{"id":23334,"date":"2025-12-24T14:27:50","date_gmt":"2025-12-24T08:57:50","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=23334"},"modified":"2025-12-24T14:27:50","modified_gmt":"2025-12-24T08:57:50","slug":"relationship-of-nifty50-with-eicher-motors","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23334","title":{"rendered":"Relationship of Nifty50 with EICHER MOTORS"},"content":{"rendered":"<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Introduction:<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">Eicher Motors Limited (EML) is\u00a0an Indian multinational automotive company and a global leader in middleweight motorcycles and commercial vehicles. Headquartered in New Delhi, the company is the parent of the iconic\u00a0Royal Enfield\u00a0brand and operates a major joint venture with the\u00a0Volvo Group.\u00a0<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-family: 'Times New Roman',serif\">Core Business Segments<\/span><\/b><\/p>\n<ul style=\"margin-top: 0cm\" type=\"disc\">\n<li class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">Royal Enfield (Motorcycles):\u00a0As a wholly-owned subsidiary, Royal Enfield is recognized as the world&#8217;s oldest motorcycle brand in continuous production (since 1901). It leads the global mid-size motorcycle segment (250cc\u2013750cc) with popular models like the Classic 350, Bullet, Himalayan, and Interceptor 650.<\/span><\/li>\n<li class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">VE Commercial Vehicles (VECV):\u00a0A 54.4:45.6 joint venture between Eicher Motors and the Volvo Group. VECV manufactures a complete range of Eicher branded trucks and buses, as well as Volvo trucks and buses in India. It also serves as a global hub for medium-duty engines for the Volvo Group.\u00a0<\/span><\/li>\n<\/ul>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Objective:<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">Calculation of beta of Eicher Motors and observe its significance<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Literature Review:\u00a0 \u00a0 \u00a0<\/span><\/b><\/p>\n<p class=\"MsoListParagraph\" style=\"margin-left: 72.0pt;text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><b><span style=\"font-family: 'Times New Roman',serif\">Ratio analysis of Eicher Motors<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">Several studies have examined Eicher Motors\u2019 financial performance through ratio analysis, highlighting its strong profitability, efficient asset use and conservative leverage policy. One such study, \u201cRatio Analysis: A Study on Financial Performance of Eicher Motors,\u201d evaluates liquidity, solvency, activity and profitability ratios over multiple years and concludes that the company maintains a healthy current ratio, high interest\u2011coverage and consistently strong return on equity, reflecting robust financial health and value creation for shareholders. The authors also note that stable or improving net profit margins and efficient inventory and receivables management have supported sustained earnings growth, positioning Eicher Motors favourably within the Indian automobile sector.<\/span><\/p>\n<p class=\"MsoListParagraph\" style=\"margin-left: 72.0pt;text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><b><span style=\"font-family: 'Times New Roman',serif\">Financial statement\u2013based performance analysis<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">Another line of work analyses Eicher Motors using financial statement analysis across income statement, balance sheet and cash flow data to evaluate growth, profitability and capital structure. A recent article titled \u201cFinancial Statement Analysis of Eicher Motors\u201d studies performance over 2018\u20132022 and reports sustained revenue and profit growth, strong operating and net profit margins, low debt, and healthy operating cash flows, indicating a solid business model and prudent financial management. The study further highlights strategic initiatives\u2014such as the Volvo joint venture, expansion into export markets and entry into electric vehicles\u2014as key drivers supporting financial strength and long\u2011term competitiveness.<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Data Collection:<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">The data of Nifty 50 and the data for Eicher motors was downloaded from 01-12-2024 to\u00a0\u00a0 30-11-2025 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and Eicher Motors. Weekly return was calculated by the formula (Yt+1-Yt)\/Yt*100 and then weekly returns of the Nifty 48 was taken as X and the equity of Eicher Motors was taken as Y. Y was regressed on X.<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Data Analysis:<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-family: 'Times New Roman',serif\">Your company Returns = <\/span><\/b><b><span style=\"font-size: 11.0pt;line-height: 115%;font-family: 'Times New Roman',serif;color: black\">-0.586444454<\/span><\/b><b><span style=\"font-family: 'Times New Roman',serif\">+0.1286(NIFTY 50)<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-family: 'Times New Roman',serif\">Estimated model:\u00a0<\/span><\/b><!-- [if gte msEquation 12]&gt;--><span style='font-family:\"Cambria Math\",serif;font-weight:bold'><\/span><b><i><span style='font-family:\"Cambria Math\",serif'>Y<\/span><\/i><\/b><b><i><span style='font-family:\"Cambria Math\",serif'>=-0.5864+1.0216X<\/span><\/i><\/b><!-- [if !msEquation]--><span style=\"font-family: Times New Roman, serif\"><b><!--[endif]-->Y = -0.5864+1.0216X<\/b><\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">The above regression equation explains the relationship between the dependent variable (stock returns) and the independent variable (NIFTY 50 index values) using 48 weekly observations.<\/span><\/p>\n<p class=\"MsoListParagraphCxSpFirst\" style=\"text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-size: 11.0pt;line-height: 115%;font-family: Symbol;color: black\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><span style=\"font-family: 'Times New Roman',serif\">The coefficient of X Variable 1 is positive (<\/span><span style=\"font-size: 11.0pt;line-height: 115%;font-family: 'Abadi',sans-serif;color: black\">1.021597975<\/span><span style=\"font-family: 'Times New Roman',serif\">), indicating a positive but very weak relationship between the variable and the dependent outcome. This implies that a one-unit increase in X Variable 1 leads to an average increase of approximately 0.1216 units in the output, though the statistical evidence suggests this relationship is not reliable.<\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-size: 11.0pt;line-height: 115%;font-family: Symbol;color: black\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><span style=\"font-family: 'Times New Roman',serif\">The regression results indicate that the coefficient of X Variable 1 has a t-statistic of \u22121.226 with a corresponding p-value of 0.226. Since the p-value is greater than both the 1% and 5% levels of significance, the null hypothesis cannot be rejected at either level.<\/span><\/p>\n<p class=\"MsoListParagraphCxSpLast\" style=\"text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-size: 11.0pt;line-height: 115%;font-family: Symbol;color: black\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><span style=\"font-family: 'Times New Roman',serif\">The coefficient of determination (R\u00b2) of the model is <b>low (approximately 0.03)<\/b>, indicating that only about <b>3% of the variation in returns<\/b> is explained by X Variable. This suggests that the model has weak explanatory power and that the independent variable contributes very little to explaining changes in returns.\u00a0<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">Conclusion:<\/span><\/b><\/p>\n<p class=\"MsoListParagraphCxSpFirst\" style=\"text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><span style=\"font-family: 'Times New Roman',serif\">The regression analysis reveals a very weak and statistically insignificant relationship between the stock and the market index (X Variable 1). The estimated beta coefficient (\u03b2 = 0.1287) is positive but statistically insignificant, with a p-value of 0.6836, which is higher than both the 1% and 5% levels of significance. This indicates that the stock\u2019s returns do not move systematically with the overall market, and the beta value suggests negligible sensitivity to market risk.<\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\"><span style=\"font-family: 'Times New Roman',serif\">\u00a0<\/span><\/p>\n<p class=\"MsoListParagraphCxSpLast\" style=\"text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><!--[endif]--><span style=\"font-family: 'Times New Roman',serif\">The R\u00b2 value of 0.0036 indicates that only 0.36% of the variation in the stock\u2019s returns is explained by movements in the market index, reflecting extremely low explanatory power. Furthermore, the insignificant F-statistic (Significance F = 0.6836) confirms the poor model fit. Overall, the findings suggest that the stock does not behave as a market-aligned security, and its return movements are largely driven by firm-specific factors rather than broader market conditions.<\/span><\/p>\n<p class=\"MsoNormal\"><span style=\"font-family: 'Times New Roman',serif\">\u00a0<\/span><\/p>\n<p class=\"MsoNormal\"><b><span style=\"font-size: 14.0pt;line-height: 115%;font-family: 'Times New Roman',serif\">References:<\/span><\/b><\/p>\n<p class=\"MsoNormal\"><span style=\"text-indent: -18pt;font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><span style=\"text-indent: -18pt\">Som, B. K., Goel, H., &amp; Kaur, J. (2019).\u00a0<\/span><i style=\"text-indent: -18pt\">Ratio analysis: A study on financial performance of Eicher Motors<\/i><span style=\"text-indent: -18pt\">. (Business\/Economics working paper or conference paper; accessed via Semantic Scholar).<\/span><\/p>\n<p style=\"margin-left: 18.0pt;text-indent: -18.0pt\"><!-- [if !supportLists]--><span style=\"font-family: Symbol\">\u00b7<span style=\"font-size: 7pt;line-height: normal;font-family: 'Times New Roman'\">\u00a0 \u00a0 \u00a0 \u00a0<\/span><\/span><span style=\"font-size: 12.0pt;line-height: 115%;font-family: 'Aptos',sans-serif\">C Mishra,\u00a0D Mahajan (2012<\/span><span style=\"text-indent: -18pt\">). <\/span><i style=\"text-indent: -18pt\">Financial statement analysis of Eicher Motors<\/i><span style=\"text-indent: -18pt\">.\u00a0<\/span><i style=\"text-indent: -18pt\">Journal of Commerce, Business and Law<\/i><span style=\"text-indent: -18pt\"> (or similar MBA\/commerce journal), 5\u2011year period study 2018\u20132022. Retrieved from MB Journals website.<\/span><\/p>\n<p style=\"margin-left: 18.0pt;text-indent: -18.0pt\"><!-- [if !supportLineBreakNewLine]--><br \/><!--[endif]--><\/p>\n<p><span style=\"font-size: 12.0pt;line-height: 115%;font-family: 'Aptos',sans-serif\"> <!-- [if !supportLineBreakNewLine]--><br \/><!--[endif]--><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Introduction: Eicher Motors Limited (EML) is\u00a0an Indian multinational automotive company and a global leader in middleweight motorcycles and commercial vehicles. Headquartered in New Delhi, the company is the parent of the iconic\u00a0Royal Enfield\u00a0brand and operates a major joint venture with the\u00a0Volvo Group.\u00a0 Core Business Segments Royal Enfield (Motorcycles):\u00a0As a wholly-owned subsidiary, Royal Enfield is recognized&hellip; <a class=\"more-link\" href=\"http:\/\/www.sachdevajk.in\/?p=23334\">Continue reading <span class=\"screen-reader-text\">Relationship of Nifty50 with EICHER MOTORS<\/span><\/a><\/p>\n","protected":false},"author":139998,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23334","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\/23334","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\/139998"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23334"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23334\/revisions"}],"predecessor-version":[{"id":23335,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23334\/revisions\/23335"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23334"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}