MP-2 REPORT

ECO347
RACHIT BHAGAT-2210110488
PRATHAM GUPTA-2210110470

INSTRUCTOR: MR JAIDEEP GHOSH

 SECTORS AND COMPANIES
We have taken into consideration 3 main sectors: IT (Information technology),
Finance and FMCG (fast moving consumer goods).

The Blue-chip companies in the corresponding sector are- HDFC bank, Hindustan
Unilever and Tata Consultancy services

The Mid cap companies in the corresponding sector are- Muthoot Finance, Gillette
India and Tata Elxsi

BUSINESS REPORT 2
HDFC BANK
Company introduction
HDFC Bank is one of the leading private sector banks in India, with a strong presence in the country's
banking and financial services sector. Established in 1994, HDFC Bank has grown to become the
largest private sector bank in India by market capitalization, providing a wide range of banking and
financial products and services to its customers across the country.

The bank offers a comprehensive suite of products and services, including personal banking,
corporate banking, investment banking, insurance, and treasury services, among others. It has a vast
network of branches, ATMs, and digital platforms, enabling customers to access its services easily
and conveniently

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: HDFCC$`LOG RETURNS`
D = 0.99849, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 3
TATA CONSULTANCY SERVICES
Company introduction
Tata Consultancy Services (TCS) is a global leader in providing IT services, consulting, and business
solutions to a wide range of clients across multiple industries. Established in 1968, TCS is part of the
Tata Group, one of India's largest and most respected conglomerates.

With a workforce of over 500,000 employees in more than 46 countries, TCS is known for its expertise
in delivering end-to-end solutions and services to help its clients drive digital transformation and
achieve business success. The company has a strong focus on innovation and is constantly exploring
new technologies and solutions to address evolving customer needs

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: TCSS$`LOG RETURN`
D = 0.99841, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 4
HINDUSTAN UNILEVER
Company introduction
Hindustan Unilever Limited (HUL) is a subsidiary of the British-Dutch multinational consumer goods
company Unilever. Established in 1933, HUL is one of the largest consumer goods companies in
India, with a vast portfolio of products across categories such as home care, personal care, foods,
and beverages.

HUL's products are household names in India, and the company has a strong market presence across
urban and rural areas of the country. Its popular brands include Dove, Surf Excel, Lux, Lifebuoy,
Pepsodent, Lipton, Brooke Bond, and Knorr, among others.

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: HULL$`LOG RETURN`
D = 0.99825, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 5
MUTHOOT FINANCE
Company introduction
Muthoot Finance Limited is a non-banking financial company (NBFC) based in India. It was founded in
1939 by M. George Muthoot and is headquartered in Kochi, Kerala. The company provides a wide
range of financial services, including gold loans, microfinance, affordable housing finance, insurance,
foreign exchange, and money transfer services.

Muthoot Finance is one of the largest gold loan companies in India, with a dominant market share.
The company has a strong presence in both rural and urban areas of the country, with over 5,500
branches in 29 states and 7 union territories.

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: MTHOOT$`LOG RETURN`
D = 0.99826, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 6
GILLETTE INDIA
Company introduction
Gillette India Limited is a subsidiary of Procter & Gamble, a multinational consumer goods company
based in the United States. Gillette India was founded in 1984 and is headquartered in Mumbai, India.
The company is engaged in the manufacturing and sale of grooming products for men and women.

Gillette India's product portfolio includes razors, blades, and shaving foams for men, and razors and
hair removal products for women. The company's flagship brand, Gillette, is one of the most
recognized and trusted brands in the grooming industry. Gillette India also offers other popular brands
such as Venus, Old Spice, and Braun.

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: GLT$`LOG RETURN`
D = 0.9985, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 7
TATA ELXSI
Company introduction
Tata Elxsi Limited is a leading global design and technology services company headquartered in
Bangalore, India. The company is part of the Tata Group, one of India's largest conglomerates, and
was founded in 1989. Tata Elxsi provides end-to-end product engineering and design services to
various industries, including automotive, broadcast and communication, healthcare, and media and
entertainment.

The company's automotive division provides engineering and design services to major automotive
OEMs and Tier-1 suppliers across the world. Tata Elxsi's services include product design and
development, testing and validation, and system integration for autonomous and connected vehicles.
The company is also involved in the development of advanced driver assistance systems (ADAS) and
electric vehicle (EV) technology.

Figure 1

Normal Probability test

The normal probability done on excel provides us with the z-score values of the given log returns
which are then plotted into the graph above

Normality
On running the Kolmogorov-Smirnov tests on r-studio we get the following values:
data: ELXSI$`LOG RETURN`
D = 0.99825, p-value < 2.2e-16
alternative hypothesis: two-sided

This suggests that given data is not normal as p-value<0.05 and alternate hypothesis is accepted.

BUSINESS REPORT 8
CORRELATION BETWEEN PAIRS OF
COMPANIES

CORRELATION OF NET
RETURNS

HDFC-TCS 0.1161
TCS-HUL 0.0428
HUL-HDFC 0.0493
GILLETTE-ELXSI -0.0422
MUTHOOT
GILLETTE 0.0151
ELXSI-MUTHOOT -0.0170

BLUE CHIPS vs MID CAPS

HDFC-MUTHOOT 0.0378
GILLETTE-HUL -0.0229
TCS-ELXSI 0.0595

The correlation coefficient measures the strength and direction of the linear relationship between two
variables. A value of +1 indicates a perfect positive correlation, 0 indicates no correlation, and -1
indicates a perfect negative correlation.

Based on the correlation values provided:

HDFC-TCS: There is a weak positive correlation (0.1161) between the returns of HDFC and TCS.

TCS-HUL: There is a very weak positive correlation (0.0428) between the returns of TCS and HUL.

HUL-HDFC: There is a very weak positive correlation (0.0493) between the returns of HUL and
HDFC.

GILLETTE-ELXSI: There is a weak negative correlation (-0.0422) between the returns of Gillette and
ELXSI.

MUTHOOT GILLETTE: There is a very weak positive correlation (0.0151) between the returns of
Muthoot and Gillette.

ELXSI-MUTHOOT: There is a very weak negative correlation (-0.0170) between the returns of ELXSI
and Muthoot.

BUSINESS REPORT 9
In terms of Blue Chips vs Mid-Caps:

HDFC-MUTHOOT: There is a very weak positive correlation (0.0378) between the returns of HDFC
and Muthoot.

GILLETTE-HUL: There is a weak negative correlation (-0.0229) between the returns of Gillette and
HUL.

TCS-ELXSI: There is a moderate positive correlation (0.0595) between the returns of TCS and
ELXSI.

Overall, the correlation values suggest that there is generally a weak or very weak linear relationship
between the returns of the stocks in these pairs. However, it is important to note that correlation does
not necessarily imply causation, and other factors may be at play in determining the returns of these
stocks.

BUSINESS REPORT 10
BUSINESS REPORT 11