{"id":23521,"date":"2025-12-30T10:22:28","date_gmt":"2025-12-30T04:52:28","guid":{"rendered":"http:\/\/www.sachdevajk.in\/?p=23521"},"modified":"2025-12-30T10:22:28","modified_gmt":"2025-12-30T04:52:28","slug":"relationship-between-pidilite-industries-ltd-and-nifty-50-index","status":"publish","type":"post","link":"http:\/\/www.sachdevajk.in\/?p=23521","title":{"rendered":"Relationship between Pidilite Industries Ltd. and Nifty 50 Index"},"content":{"rendered":"

Prasad Satvi<\/span><\/p>\n

I<\/span><\/span>ntroduction<\/span><\/span><\/p>\n

Pidilite Industries Ltd. is one of India\u2019s foremost manufacturers of\u00a0<\/span>adhesives, sealants, construction chemicals, and art materials<\/span>, with a strong presence across both industrial and consumer segments. The company is widely recognized for its flagship brand\u00a0<\/span>Fevicol<\/span>, which dominates the Indian adhesives market and enjoys high brand recall among consumers. Founded in\u00a0<\/span>1959<\/span>, Pidilite has built a reputation for\u00a0<\/span>innovation, quality, and reliability<\/span>, consistently demonstrating strong financial performance and robust market growth over the decades.<\/span><\/p>\n

In addition to adhesives, Pidilite has diversified its product portfolio to include\u00a0<\/span>construction chemicals, waterproofing solutions, hobby and craft materials, and specialty chemicals<\/span>, catering to a wide range of industries and consumer needs. The company\u2019s extensive distribution network and strategic marketing initiatives have reinforced its position as a market leader.<\/span><\/p>\n

Objective<\/span><\/span><\/p>\n

The objective of this study is\u00a0<\/span>to calculate the beta of Pidilite Industries Ltd. and observe its significance with respect to the Nifty 50 Index<\/span>.<\/span><\/p>\n

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

Bodie, Kane, and Marcus (2021) explain that beta is a fundamental measure of systematic risk in the Capital Asset Pricing Model (CAPM). According to the authors, beta measures the responsiveness of a stock\u2019s returns to changes in the overall market return. A beta greater than one indicates that the stock is more volatile than the market, while a beta less than one suggests defensive behaviour. The study emphasizes that regression analysis of stock returns on market returns is the most commonly used method to estimate beta. This concept is highly relevant to the present study, which uses regression analysis to examine the relationship between Pidilite Industries Ltd. and the Nifty 50 Index.[1]<\/span><\/p>\n

Brealey, Myers, and Allen (2020) state that market-related risk cannot be eliminated through diversification and is captured through the beta coefficient. Their research highlights that stocks with higher beta values tend to provide higher returns during bullish market conditions but also carry higher risk during market downturns. This literature supports the methodology used in the current study, where the weekly returns of Pidilite Industries Ltd. are regressed on the weekly returns of the Nifty 50 Index to evaluate beta and its significance. [2]<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u00a0<\/span><\/p>\n

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

The data for\u00a0<\/span>Pidilite Industries Ltd.<\/span>\u00a0and the\u00a0<\/span>Nifty 50 Index<\/span>were downloaded from\u00a0<\/span>NSE India\u00a0<\/span>www.nseindia.com<\/span><\/a>\u00a0<\/span>for the period\u00a0<\/span>1st December 2024 to 30th November 2025<\/span>.<\/span>
<\/span>Friday closing prices were used to calculate\u00a0<\/span>weekly returns<\/span>.<\/span><\/p>\n

\u2022\u00a0<\/span>Weekly returns of\u00a0<\/span>Nifty 50<\/span>\u00a0were taken as\u00a0<\/span>X (independent variable)<\/span><\/div>\n
\u2022\u00a0<\/span>Weekly returns of\u00a0<\/span>Pidilite Industries Ltd.<\/span>\u00a0were taken as\u00a0<\/span>Y (dependent variable)<\/span>
<\/span>The weekly returns of Pidilite Industries Ltd. were regressed on the weekly returns of the Nifty 50 Index using linear regression.<\/span><\/div>\n

Data Analysis<\/span><\/span><\/p>\n

The estimated regression equation based on the analysis is:<\/span><\/p>\n

Y=<\/span>–<\/span>0.0183+1.897X<\/span><\/p>\n

Where:<\/span><\/p>\n

\u2022\u00a0<\/span>Y = Weekly return of Pidilite Industries Ltd.<\/span><\/div>\n
\u2022\u00a0<\/span>X = Weekly return of Nifty 50<\/span><\/div>\n

Regression Statistics:<\/span><\/span><\/p>\n

\u2022\u00a0<\/span>N =\u00a0<\/span>48<\/span><\/div>\n
\u2022\u00a0<\/span>R\u00b2 = 0.1104<\/span><\/div>\n
\u2022\u00a0<\/span>Adjusted R\u00b2 = 0.0911<\/span><\/div>\n
\u2022\u00a0<\/span>Standard Error = 0.1024<\/span><\/div>\n
\u2022\u00a0<\/span>Beta (Slope coefficient) =\u00a0<\/span>1.897<\/span><\/div>\n

\u00a0<\/span><\/p>\n

Interpretation<\/span><\/span><\/p>\n

\u2022\u00a0<\/span>Relationship Between Pidilite and Nifty 50<\/span><\/div>\n

The regression equation indicates a positive relationship between the weekly returns of Pidilite Industries Ltd. and the Nifty 50 index.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u2022\u00a0<\/span>Slope (Beta)<\/span><\/div>\n

The beta (slope coefficient) is 1.897, meaning that for every 1% change in the Nifty 50\u2019s weekly return, Pidilite\u2019s weekly return changes by approximately 1.897%. This indicates that Pidilite is more volatile than the market.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u2022\u00a0<\/span>Statistical Significance<\/span><\/div>\n

The t-statistic for beta is 2.39 with a p-value of 0.021, which is less than 0.05. Therefore, the beta is statistically significant at the 5% level.<\/span><\/p>\n

The intercept is not statistically significant (p = 0.222), which implies the average weekly return of Pidilite when the Nifty return is zero is not significantly different from zero.<\/span><\/p>\n

\u00a0<\/span><\/p>\n

\u2022\u00a0<\/span>Overall Model Significance<\/span><\/div>\n

The F-statistic is 5.711 with a p-value of 0.021, suggesting that the regression model is statistically significant overall.<\/span><\/p>\n

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

Since the beta of Pidilite Industries Ltd. is\u00a0<\/span>1.897<\/span>, which is greater than 1, the stock is more volatile than the overall market. This implies that Pidilite\u2019s returns tend to amplify market movements. Therefore, investors may consider investing in Pidilite Industries Ltd. for\u00a0<\/span>short-term gains<\/span>\u00a0if the Nifty 50 is expected to rise, as the stock is likely to generate higher returns than the market during bullish conditions. However, due to its higher volatility, investors should also be aware of the potential for larger losses during market downturns<\/span>.<\/span><\/p>\n

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

[1] Bodie, Z., Kane, A., & Marcus, A. J. (2021).\u00a0<\/span>Investments<\/span>(11th ed.). McGraw-Hill Education.<\/span><\/p>\n

[2] Brealey, R. A., Myers, S. C., & Allen, F. (2020).\u00a0<\/span>Principles of Corporate Finance<\/span> (13th ed.). McGraw-Hill Education.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Prasad Satvi Introduction Pidilite Industries Ltd. is one of India\u2019s foremost manufacturers of\u00a0adhesives, sealants, construction chemicals, and art materials, with a strong presence across both industrial and consumer segments. The company is widely recognized for its flagship brand\u00a0Fevicol, which dominates the Indian adhesives market and enjoys high brand recall among consumers. Founded in\u00a01959, Pidilite has… Continue reading Relationship between Pidilite Industries Ltd. and Nifty 50 Index<\/span><\/a><\/p>\n","protected":false},"author":140036,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-23521","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\/23521","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\/140036"}],"replies":[{"embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23521"}],"version-history":[{"count":1,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23521\/revisions"}],"predecessor-version":[{"id":23522,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=\/wp\/v2\/posts\/23521\/revisions\/23522"}],"wp:attachment":[{"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23521"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.sachdevajk.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}