Title: Relationship of HINDUSTAN UNILEVER with NIFTY50.
Author: HEMANSHI JAIN
Intro: About Hindustan Unilever Limited.
Hindustan Unilever Limited (HUL) is a British-owned Indian Final good company headquartered in Mumbai. It is a subsidiary of the British company Unilever. Its products include foods, beverages, personal care products, water purifiers and other fast moving consumer goods (FMCGs).
HUL was established in 1931 as Hindustan Vanaspati Manufacturing Co. Following a merger of constituent groups in 1956, it was renamed Hindustan Lever Limited. The company was renamed again in June 2007 as Hindustan Unilever Limited.
As of 2019, Hindustan Unilever’s portfolio had more than 50 product brands in 14 categories. The company has 21,000 employees and recorded sales of ₹34,619 crores in FY2017–18.
Objective: To calculate Beta and its significance.
Views and Reviews: HUL’s performance points to a lack of revival in demand and points to weak numbers by consumer companies particularly those catering to rural India like Dabur and Emami. The company has to contend with two issues. Slowing volume growth and lack of price growth on account of falling commodity prices. The markets gave a resounding thumbs down to HUL’s performance. Through the day the stock traded below and ended the day down 3.67 percent at Rs 2,604. The company’s market cap stands at Rs 6,11,833 crore. The stock is up 4 percent in the last year compared to a CAGR of 14 percent over the last decade.
Data collection: Nifty and HINDUSTAN UNILEVER closing price was collected from NSE website. Weekly return of Nifty is termed as “X” and weekly return is HINDUSTAN UNILEVER termed as “Y”. Besides that, a few other things written in this report are taken from other websites and its information is provided in references.
Data Analysis:
Equation: Y=0.020 + (-0.085) x
Interpretation:
The above equation shows the relation between Nifty50 and Hindustan Unilever.
Return of HINDUSTAN UNILEVER is dependent variable and return of Nifty50 is independent variable.
Positive sign means if Nifty50 rises by 1 unit then share price of Hindustan Unilever will also rise by 0.0009 and vice-versa.
Number of observations are 49.
0.2084 is the t-stat for Y, the p-value for which is 0.83.
R square is 0.0009 which means 36% of variances in HINDUSTAN UNILEVER are explained by Nifty.
F is 0.0409606 , p-value for this is 0.54 which means model is statistically significant at 1% level.
Conclusion: Beta is -0.08587 which is less than 1, it means that HINDUSTAN UNILEVER is good for long term investment.
Reference: