Title: Relationship of Sula Vineyards Limited Share with Nifty50
Author: Suraj Sonawane (MMS First year, Roll no.0222120) Kohinoor Business School, Kurla.
INTRODUCTION
Sula Vineyards (or “Sula“) is a winery and vineyard located in the Nashik region of western India, 180 km northeast of Mumbai. It was founded by Rajeev Samant in 1999.[2] Sula has grown to be India’s largest and most awarded wine brand. Sula introduced grape varietals such as Chenin blanc, Sauvignon blanc, Riesling and Zinfandel in India and is the leading player in the Indian wine industry.
OBJECTIVE
Calculate BETA of Sula Vineyards Limited and observe its Significance
VIEW & Review
Rajeev Samant
(Chief Executive Officer)
Our revenue has grown by 22% in comparison to the previous year and has reached a total of INR118 crores for the quarter. Very notably, our Own Brands have taken the lead and as you all know, this is the aim of the company. We are now very much an Own Brand led company. The Own Brands have taken the lead, driving this growth with an increase of 30%. Our EBITDA margin is about the same as last Q1. It’s at about 27%, just an increase of 27 basis points from the already strong margins achieved in Q1 last year. And additionally, our PAT margin has risen to 11.7%. That’s a growth of 32 basis points compared to last year. So this financial performance in setting all these records on all fronts in underscores our commitment to sustained growth and operational excellence. Our premiumization strategy, as you know, that’s another pillar of our overall strategy. Own brands, premiumization. The strategy is bearing fruit as our Elite and Premium wines together surged more than 35% in value and over 30% in volumes. So this is something that we are particularly very pleased about. We continue to focus on our premium brands and you should know that in the last couple of years, almost all of our brand launches have been in these segments.
DATA ANAYSIS
Equation
Y= 1.0238+1.6343 (X)”
(tstat = 1.728561)
n = 2
R2 = 0.11497
F = 2.987922
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of Sula Vineyards Ltd. (y) the positive sign means a negative relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by 1.6343, “n” means there are 25 observations. The t-stat for b is 1.728561, which means b is statistically significant at 5% level. R2 is 0.11497 means 11.49% of y is explained by x, balance 88.51% is error due to the variables which are not in model. As the calculated value of F =2.987922 is less than the tabulated F (F 0.05,1DF,23DF) = 4.279, the overall model is not statistically significant at the 5% level.
So overall the model is not statistically significant at the 5% level.
CONCLUSION
As Beta is 1.6343 which is more than 1, the share is good for short term