Relationship of Hindustan Unilever Limited (HUL) with Nifty.
Author: Harshal Sonawane – Roll No. 119
Introduction: Hindustan Unilever Limited (HUL) is a big company in India that makes many different products for everyday life. They create things like soaps, shampoos, food, and cleaning items. People all around India use their products every day. HUL started a long time ago and has grown a lot since then. They focus on making things that help people live better and cleaner lives. Many people like and trust HUL’s products because they are of good quality and are easy to find in shops. HUL cares about the environment and helping communities. Overall, HUL is a well-known company that makes things that people use in their daily routines.
Objective: To Calculate the Beta of HUL and find out its significance.
Views & Reviews:
1] Mr Rohit Jawa, CEO & Managing Director, HUL, said, “The state-of-the-art Suvidha Centres foster holistic health and wellbeing of all citizens by providing them affordable access to safe toilets, clean drinking water, showers and laundry services. With the expansion of the Suvidha Model in Dharavi (a total of 3 now), we, along with our partners BMC and HSBC India, remain committed to transforming community hygiene and sanitation services for all.”
2] Rohit Jawa, CEO and Managing Director,HUL, commented ‘FMCG markets are recovering gradually although the operating environment remains challenging. In this context we have delivered a resilient and competitive performance whilst stepping up our EBITDA margin.
In the near-term, FMCG industry will continue to witness rebalancing of price-volume growth equation and a gradual recovery in consumer demand. In this environment we will continue to provide superior value to our consumers and invest behind our brands. We remain focused on driving our long-term strategic priorities including market development and building distinctive capabilities for the future. I am confident of the medium to long term prospects of the Indian FMCG sector and HUL’s ability to deliver a Consistent, Competitive, Profitable and Responsible growth.’
Data Collection: The Data for the period 01- 06-2022 to 31-07-2023 has been downloaded from the NSE site, then Friday’s closing price was sorted and weekly returns of Nifty taken as X and weekly return of Hindustan Unilever Limited(HUL) taken as Y were calculated.
Data Analysis:
Equation “Y=0.2239+0.3242(X)”
(tstat =1.3270)
n = 50, R2 = 0.0354, F = 1.7611
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of HUL (y). The positive sign means a positive relationship meaning if “x” rises “y” rises and vice versa. If “x” rises by 1 unit, “y” rises by 0.3242, “n” means there are 50 observations. The t-stat for b is 1.3270, which means b is statistically significant at 5% level. R2 is 0.0354 means 3.54% of y is explained by x, balance 96.46% is error due to the variables which are not in model. As the calculated value of F =1.7611 is less than the tabulated F (F 0.05, 1DF, 48DF) = 4.043, 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 0.3242 which is less than 1, the share is good for long term.
References:
https://www.hul.co.in/news/press-releases/2023/hul-and-hsbc-launch-new-suvidha-centre-in-dharavi/
https://www.hul.co.in/news/press-releases/2023/results-for-the-quarter-ended-30thjune-2023/