TITLE

Relationship between Maruti Suzuki India ltd with NIFTY 50.

AUTHOR

Madhuri M. Shirkar (Kohinoor Business School, Roll no. 40)

INTRODUCTION
Maruti Suzuki India Limited, formerly known as Maruti Udyog Limited, is an automobile
manufacturer in India. It is a 56.21% owned subsidiary of the Japanese car and motorcycle
manufacturer Suzuki Motor Corporation. As of July 2018, it had a market share of 53% of the
Indian passenger car market. Maruti Suzuki manufactures and sells popular cars such as
the Ciaz, Ertiga, Wagon R, Alto K10 and Alto 800, Swift, Celerio, Swift Dzire, Baleno and Baleno
RS, Omni, baleno, Eeco, Ignis, S-Cross, Vitara Brezza and newly launched S-Presso small SUV.
The company is headquartered at New Delhi. In May 2015, the company produced its fifteen
millionth vehicle in India, a Swift Dzire.

OBJECTIVE

To find out the Beta of Maruti Suzuki India Ltd and find its significance.

DATA COLLECTION

Data was collected and downloaded from National Stock Exchange (nse) from 1 st February,2019
to 31st January,2020. All the columns were deleted except the dates and the closing price. A
column was inserted between the dates and the closing price. Weekday formula was put. Only
the Friday closing price was observed. Weekly return was calculated.
“X” being the weekly returns of NIFTY and “Y” being the weekly return of Maruti Suzuki India Ltd.
Regression was done.

DATA ANALYSIS

Utilizing the Regression Add-on in Microsoft Excel Data Analytics tool below values were acquired

Equation: Ŷ = 0.008 + 0.50 X

(1.626)*
a= 0.008
b= 0.50
R2= 0.051
F= 2.645
P value= 0.11
t-stat=1.626

The above equation tells us the relationship between X and Y (weekly returns of NIFTY 50 and Maruti
Suzuki India Ltd). In this equation a positive sign indicates a direct relationship between NIFTY 50 and
Maruti Suzuki India Ltd, in which if there is an increase in weekly returns of NIFTY 50, there would
surely be an increase in weekly returns of Maruti Suzuki India Ltd.

t-Stat for b (1.626) and the p value (0.11) is more than 0.05 which means b is not statistically
significant at 5% level.

F value 2.645 is greater than P value this model is not statistically good and significant.

R2 is 0.05121 i.e. 5% , which means 5% of weekly returns of Maruti Suzuki India Ltd is explained by
NIFTY 50. Rest 95% by other factors.

CONCLUSION

R square value is 5.12%. another important analysis that could be made from the give equation is
that 50.79% increase in Maruti Suzuki returns can be caused by 1% increase in weekly returns of
NIFTY 50. Since F value 2.645 is greater than P value this model is not statistically good and
significant. Risk factor of using this model for forecasting Maruti Suzuki’s weekly returns are very
high.