TITLE- RELATIONSHIP OF NIFTY AND DABUR
AUTHOR- DHARMESH CHAUDHARY
INTRODUCTION- Dabur Ltd is an Indian multinational consumer goods company, founded by S. K. Burman and headquartered in Ghaziabad, Uttar Pradesh. It manufactures Ayurvedic medicine and natural consumer products, and is one of the largest fast-moving consumer goods (FMCG) companies in India. Dabur derives around 60% of its revenue from the consumer care business, 11% from the food business and remaining from the international business unit.
OBJECTIVE- To calculate the β of company and find it’s significance.
DATA VIEWS AND REVIEWS-
1) ACCORDING TO BUSINESS LINE DATED ON 16TH MARCH 2022-
Dabur India gets relief in trademark infringement case- FMCG major Dabur India has got an interim injunction from the Delhi High Court in a trademark infringement suit filed against certain fake websites and domain names being operated in the company’s name.
The FMCG company had filed a suit seeking permanent injunction and damages in respect of infringement of its various intellectual properties including the trademark “Dabur”, copyright in the labels and packaging of its various products, passing off and unfair competition.
2) ACCORDING TO ECONOMIC TIMES MARKETS AS ON 11TH MARCH 2022-
Add Dabur India, target price Rs 560: HDFC Securities- HDFC Securities has add call on Dabur India with a target price of Rs 560. The current market price of Dabur India Ltd. is Rs 546.3. Time period given by analyst is one year when Dabur India Ltd. price can reach defined target.
Dabur India Ltd., incorporated in the year 1975, is a Large Cap company (having a market cap of Rs 96657.55 Crore) operating in FMCG sector. Dabur India Ltd. key Products/Revenue Segments include Personal Care, Other Operating Revenue .
3) ACCORDING TO MINT DATED 22ND FEBRUARY 2022,
Dabur needs to show success with new products- Fast-moving consumer goods (FMCG) companies are facing two key challenges, the sharp rise in raw material costs and the slowdown in rural demand. Unsurprisingly, shares of many FMCG companies have declined from their peaks, including those of Dabur India Ltd. True, the extent of pain because of the cost inflation and rural slowdown varies for each company. Dabur’s shares are down about 16% from their 52-week highs seen in September on NSE.
4) ACCORDING TO BUSINESS SATANDARD DATED 22ND FEBRUARY 2022-
Dabur to reach its wares to 140 mn Indane users via IndianOil delivery team- Dabur India and Indian Oil Corporation have announced an exclusive partnership to provide direct access of Dabur’s range of products to around 140 million Indane LPG consumer households across India.
As a part of the tie-up, IndianOil’s Indane LPG distributors will become retail business partners for Dabur and will help sell the entire range of Dabur’s products directly to Indane LPG consumer households, through the OMC’s network of delivery personnel.
DATA COLLECTION-
Data of equity (historical price) and index were collected https://www.nseindia.com/get-quotes/equity?symbol=DABUR and https://www1.nseindia.com/products/content/equities/indices/historical_index_data.htm respectively. Daily returns from 1st March-2021 to 28 Feb-2022 were downloaded in excel format from these websites and it was sorted into weekly format. Then weekly returns were calculated for both index and equity and then regression analysis was done.
DATA ANALYSIS-
Predicted Y = Y(Cap)= 0.145044+ 0.436547x
N=46, R Square= 0.103441, F= 5.191951
Tstat (beta) = 0.436358 Tstat (0.05,44)= 1.680
The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is Dabur’s weekly returns.
The positive sign of Beta tells us the that there is a positive relationship between NIFTY and Dabur’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.581591 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.103441 which means 10.3441% of Y (Dabur) is explained by X. And the balance is explained by error.
F is 5.191951 which is more than table value which means model is statistically significant at 5% level.
CONCLUSION
β is statistically significant in case of NIFTY and Dabur. Also, it can be concluded that Dabur is a low beta share. Since it is less than 1.