Title: Relationship of Nestle India with Nifty 50
Author: Naman Patni
Introduction: Nestlé India Limited is a subsidiary of the Swiss multinational company Nestlé S.A. It is a major player in the Indian food and beverage industry, offering a wide range of products including chocolates, beverages, dairy, and cooking aids. Presently, it is the 2nd largest FMCG in India with a market cap of ₹246915.83 (as of March 8th, 2024). It boasts a network of 8 manufacturing facilities and 4 branch offices strategically positioned. The journey of Nestle India Limited began in 1961 with the opening of its first manufacturing facility in Moga, Punjab.
Objective: To find out Beta of Nestle India and its significance
Data Collection: Data for Nifty50 & Nestle India was downloaded from NSE website, further period 1st May 2023 to 30th April 2024. Data was manipulated to get Friday closing prices & weekly returns were calculated by the Formula: Weekly returns of Nestle India was regressed on weekly returns of Nifty50.
Data Analysis: Weekly return of Nestle India = -2.0918 + 1.0653(0.7036)
N = 48, R2 = 0.01088, F = 0.49514, P-value = 0.48526
The above equation shows the relationship between Niffty50 & Nestle India. The Negative sign before 2.0918 means if Nifty raises then Nestle India falls & vice versa. The Coefficient of Nifty50 has t stat = (0.7036) & the P value of which is 0.3162 which is more than 0.05 meaning nifty 50 is not Statistically Significant to Increase the Prices of Nestle India. To increase the prices of Nestle India, R2 is 0.01088 meaning of 1.08% of Nestle India prices explained by Nifty50. 98.92% dependent upon other factors like fundamentals are other factors. F is 0.49514 & the P value of this is 0.3162 meaning it is more than 0.05 meaning the overall all model is not statistically significant.
Conclusion: Weekly return of Coefficient is 1.0653 which is more than 1 so it is good for short term investment.