Title: – Relationship of MC Dowells with Nifty 50
Author: – Mahesh Ramesh Tidke (MMS First Year, Roll no. 0222093)
Kohinoor Business School, Kurla.
Introduction: -is an Indian brand of spirits manufactured by United Spirits Limited (USL), a Diageo Group company. It is USL’s flagship brand[1] and the largest umbrella spirits brand in the world, comprising three categories – whisky, brandy and rum (under the name McDowell’s No.1 Celebration).[2] The brand also has bottled water[3] and soda.[4] The brand began with the launch of McDowell’s No.1 Brandy in 1963–64.[5] The brand’s slogan is No1 Yaari Ka No1 Spirit.[6].
The current owners of MC Dowells Technologies are:
Ravi Pandit – Chairman and Group CEO
Vijay Mallya – CEO and MD
Private Shareholders – 40.3%
Public shareholders – 59.7%
MC Dowellsis a publicly traded company listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) of India
Objective: – To Calculate the Beta of and find out its significance.
Views and Reviews: –
In 1959, Mallya established McDowell and Company’s first distillery at Cherthala, Kerala, and began bottling Bisquit Brandy and Dorville French Brandy from imported concentrates. The company commissioned India’s first distillation plant at Cherthala in 1961 to produce extra neutral alcohol (ENA). The McDowell’s No.1 brand began with the launch of McDowell’s No.1 Brandy in 1963-64 following the termination of the import contract for No.1 Bisquit Brandy.[9] McDowell’s No.1 Whisky was launched in 1968 and McDowell’s No.1 Rum was launched in Celebration (dark) and Caribbean (white) variants in 1990-91.[5][10]
The company was incorporated in 1999 as McDowell Spirits Ltd and changed its name from McDowell Spirits Ltd to McDowell and Company Ltd on 1 April 2000. The company changed its name again, to the current United Spirits Limited (USL), on 17 October 2006.[11] In 2000, Claessens International, a London-based design consulting firm, was hired to revamp the design and packaging of the series.
The total income of the Company during the financial year under review has marginally increased to Rs.140,885,782 against Rs. 128,588,029 in the previous financial year. The total expenditure during the year was Rs. 150,811,143 against Rs. 131,860,727 in the previous financial year resulting in an operational loss of Rs. 9,925,361 as compared to loss of Rs. 3,272,698 during the previous year. There has been few significant development during the year under review, namely sale of pledge shares by institution resulting in a profit of Rs. 174,287,937. The directors after critical review of the recoverability of certain loans and advances made a provision as a matter of abundance prudence amounting to Rs109,782,640. The net effect of these is a net profit of Rs. 54,579,936 against the loss of Rs. 208,343,465 in the previous year.
Data Collections: – Data is taken from 01-06-2022 to 31-07-2023. It has been downloaded from the NSE site, then Friday’s closing price was sorted and weekly returns of Nifty (i.e. X) and KPIT TECHNOLOGIES (i.e. Y) were calculated.
Data Analysis: – Equation “Y=2.0375-0.8670(X)”
(tstat = -0.6850
)
n = 50, R2 = 0.3390, F = 24.6217
The above equation shows the relationship between the closing price of Nifty 50 (x) and the closing price of MC Dowells (y) the negative sign means a negative relationship meaning if “x” rises “y” falls and vice versa. If “x” rises by 1 unit, “y” falls by 0.8670, “n” means there are 50 observations, and figures in brackets are tstat for “b”, so “b” is not as Calculated tstat -0.6850 for b i.e. is higher than tabulated t(t0.5,49DF=1.677) so reject H0 and accept H1. R2 is 0.0801 means 8.01% of y is explained by x. As the calculated value of F =24.6217
is more than the tabulated F (F 0.05,1DF,49DF) = 4.038, the overall model is statistically significant at the 5% level.
So overall the model is statistically significant at the 5% level.
Conclusion:
If b<1, MC Dowells share is good for long term investment.
References
https://www.bseindia.com/xml-data/corpfiling/AttachLive/1e8d9403-e472-4763-bfcf-c8c528083557.pdf