Title: – Relationship Between Nifty and Hindustan Unilever Limited
Author CHINTAMANI HARSH SANTOSH
Introduction
With nearly 90 years of heritage in India, Hindustan Unilever Limited (HUL) is India’s largest fast-moving consumer goods company. On any given day, nine out of ten Indian households use one or more of our brands, giving us a unique opportunity to build a brighter future. We are known for our great brands, the positive social impact we create and our belief in doing business the right way. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and the planet.
With 50+ brands spanning 15 distinct categories such as fabric solutions, home and hygiene, life essentials, skin cleansing, skin care, hair care, colour cosmetics, oral care, deodorants, tea, coffee, ice cream & frozen desserts, foods and health food drinks, the company is a part of the everyday life of millions of consumers across India.
Its portfolio includes leading household brands such as Lux, Lifebuoy, Surf excel, Rin, Wheel, Glow & Lovely, Pond’s, Vaseline, Lakme, Dove, Clinic Plus, Sun silk, Pepsodent, Closeup, Axe, Brooke Bond, Bru, Knorr, Kissan, Kwality Wall’s, Horlicks and Pureit. HUL is a subsidiary of Unilever, one of the world’s leading suppliers of Food, Home Care, Personal Care and Refreshment products with sales in over 190 countries.
Objective
Calculate Beta and its significance.
Data Collection
The raw data was downloaded from National Stock Exchange’s website. Data was edited, cleaned, and manipulated to find closing price of each weekend. Then with help of this data weekly returns were calculated
Data Analysis
Equity Y = 0.01134* Nifty X – -0.25410 + e
(3.168959)
N = 49, R2 = 0.17605, F = 10.042306
The above equation tells us about the relationship between Equity weekly return Y and Nifty weekly return X. The positive sign means direct relationship which means if Nifty weekly return increases, then equities weekly return also increases and vice versa.
If Nifty’s weekly return increase by 1% then Equity’s weekly return increases by 10.13%. The T stat of b is shown in bracket i.e., 3.168959 and P value for this is 0.0000000011711 which is less than 0.01 meaning b is statistically significant at 1% level
N = 49 and R2 is 0.17605 which means 17.6% of Y is explained by X. Balance 82.4% is error.
F is 10.04231 and P value for this is 0.0026900 which is less than 0.01. Thus overall model is significant at 1% level
Conclusion
The Beta is 10.13 i.e., greater than Hindustan Unilever Limited 1 means good for short term investment.