Title: Relationship of Nestle India Limited with Nifty
-Neelyadakshi Anandvel
Introduction: Nestlé India Limited is the Indian subsidiary of Nestlé which is a Swiss multinational company. The company is headquartered in Gurgaon, Haryana. The company’s products include food, beverages, chocolate, and confectioneries.
Objective: Calculation of Beta of Nestle and significance.
Literature Review:
1. Structure
The objective of the study is to express a brief summary about business structure of Nestlé Bangladesh Limited (NBL). The purpose of the research approach is to discuss the present and future situation of various foods and beverages of NBL. At the start we have discussed the history, market structure and strategy and business principle of Nestlé S.A. We stress current mission, vision, objectives and strategies of Nestlé in Bangladesh. NBL has some Corporate Social Responsibility (CSR) activities in, which it call Creating Shared Value (CSV). We have tried to explain briefly the CSV of the Company. (Mohajan & Haradhan, 2015)
2. Abstract
This paper explains how Nestlé used the shared value concept to make agriculture more sustainable and achieve more profit by creating business value. We use a case study approach based on qualitative research to investigate shared value in achieving sustainable agriculture. We analysed Nestlé programs in rural development, environmental sustainability, and the Water field. We found that applying the shared value concept by nestle makes agriculture more sustainable and leads to business value. (Ishak kherchi & etal, 2019).
Data Collection:
Data was collected from Yahoo Finance.com from 1st April 2022 to 31st March 2023. Then data was manipulated from Friday closing price. We found the weekly returns, weekly returns of Nifty Fifty X and weekly return of Nestle is Y. Y was regressed on X.
Data Analysis:
We can write the equation in the form of Y = a + b(X)
Where, Y = Nestle returns, X = Nifty-50 returns, a = intercept and b = slope
Hence, the equation becomes,
(Y) = -1.79032 + (-0.00443) *X
Nestle returns = (-1.79032) + (-0.00443) *(Nifty-50 returns)
t stats (-0.07401)
n= 51, R2 = 0.000112 F = 0.005477
As calculated F is more then table F overall model is statically significance at 0.941307595 level.
The above equation shows the relationship between Y and X. Negative sign means there is inverse relation which means if X Rise Y false and vice-verse. In the equation b= -0.00443. If X rise 1-unit demand “Y” Fall 4.4E-05 unit. Figure in “(-0.07401)” is the value for t stats for b. it is more than the table value. b is statically significance at 0.941307595 level. R2 = 0.012 which means 01.2% of Y is explained by X and remaining 05.98% is error.
The value of F is 0.005477 and the p-value for which is 0.941308, which is more than 0.05, which means the overall model is statistically insignificant at 5% significant level or 95% confidence level.
Conclusion:
As our Beta is less than 1 the Nestle India Limited is good for long term investment.
Reference
Mohajan, Haradhan, 2015. “Present and Future of Nestlé Bangladesh Limited,” MPRA Paper 82850, University Library of Munich, Germany, revised 05 Apr 2015.
Ishak Kherchi & Mohamed Fellague & Samira Ahlem Haddou, 2019. “How Nestle Applied Shared Value Creation in Agriculture Sector to achieve Sustainable Agriculture and Make more Profit (Nestle Model),” Management & Economics Research Journal, Faculty of Economics, Commercial and Management Sciences, Ziane Achour University of Djelfa, vol. 1(3), pages 12-26, September.