Topic: Relationship between SOM Distilleries Breweries and Wineries Ltd. (SDBL) & Nifty 50
Author: Shrinivas Mogram
Introduction: SOM Distilleries Breweries & Wineries Ltd. Is engaged in the brewing, fermentation, bottling, canning and blending of beer and Indian made Foreign Liquor (IMFL). Its product portfolio consists of various options across beer, rum, brandy, vodka and whisky categories. It has a total capacity of 23.2 million cases per annum of beer and 3.9 million cases per annum of IMFL. Its capacity is spread across three facilities located in Bhopal (Madhya Pradesh), Hasan (Karnataka) and Bamburi (Odisha).
Objective: To find Beta and find its significance.
Data Collection: The company SOM Distilleries Breweries & Wineries Ltd (SDBL). Has been taken from the NSE for the period 01-03-23 to 28-02-24. Friday closing prices were calculated and weekly results were found out. Weekly returns of SDBL were regressed on weekly returns of Nifty 50.
Data Analysis:
Regression Equation: SDBL = -1.52 – 0.09 Nifty 50
Observations(n)= 48, R Square= 0.001, F value= 0.073, P value= 0.78
The above equation shows the relationship between Som Distilleries Breweries and Wineries Ltd. & Nifty 50, Negative sign means Inverse relationship meaning if weekly returns of Nifty 50 rises then weekly returns of SDBL falls and vice versa. If Nifty 50 rises by 1 unit the SDBL will fall by 0.09 units and vice versa. T-stat for b is given bracket and the p value for which is given as 0.78, which is more than 0.05, meaning b is not statistically significant at 5% level, meaning Nifty 50 does not play a significant role for SDBL. Number of observations are 48, R2 is 0.001 meaning 0.15% of SDBL is explained by Nifty 50, balance 0.85% is error due to the variables not taken in the model. F is 0.073, the p value for which is 0.78 which is more than 0.05, so overall the model is not statistically significant.
Conclusion: The Beta value is less than 1 thus SDBL is good for long term investment.