TITLE : RELATIONSHIP OF DABUR WITH NIFTY 50
AUTHOR : DURGESH MISHRA
INTRODUCTION : Dabur India Limited is a leading fast-moving consumer goods (FMCG) company with a diverse portfolio of products, including hair care, oral care, health care, skin care, home care, and food and beverages.
Dabur India Limited was founded in 1884 by Dr. S.K. Burman, and its equity shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE). The company has a market capitalization of ₹1,01,403 Cr and a return on equity (ROE) of 18.68%. NSE Symbol: DABUR. Market Price: ₹569.40 (as of Oct 7, 2024)
OBJECTIVE : To find out the Beta of Dabur and its significance.
DATA COLLECTION :
Data of Dabur and NIFTY 50 was downloaded from 1st may 2023 to 30th April 2024 from the NSC website. The data was then manipulated to get the Friday closing prices. Weekly returns of NIFTY 50 and Dabur company were calculated, where weekly returns of the NIFTY 50 is taken as ‘X’ and weekly returns of Dabur company is taken as ‘Y’. weekly returns of Dabur was regressed on weekly returns of Nifty 50.
DATA ANALYSIS :
Weekly returns of Dabur = 0.25 + 0.55 weekly return of Nifty 50
(2.56) t Stat
N = 48 , R Square = 0.125 , F = 6.57, P Value = 0.01
INTERPRETATION :
The above equation depicts the relationship between weekly returns of Dabur and weekly returns of Nifty 50.
The plus sign before the coefficient of Nifty 50 tells that if nifty 50 rises your company will also rise and vice versa. If nifty rises by one unit Dabur will rise by 0.55 unit. Figure in the bracket is tStat for the Beta.
The P value for which is 0.01 which is less than 0.05 meaning Beta is statistically significant at 5% level.
R Square is 0.12 meaning 12% of company’s return are explained by Nifty 50. The balance 88% may be due to fundamentals.
F is 6.57 and P value is 0.01 meaning overall model is statistically significant.
Conclusion :
As Beta is 0.55, which is less than 1, hence it is advisable to invest for long term.
