Title : Relationship of Nestle with Nifty 50
Author Name : Nikhil Vinchurkar F2 Batch
Roll no : 021330124025
Introduction : Nestlé is a global powerhouse known for its strong financial performance and consistent growth across diverse markets. With annual revenues exceeding $90 billion, it has maintained a leading position in the food and beverage industry. The company’s focus on innovation, efficiency, and sustainability has driven its profitability, with strong operating margins and significant returns on investment. Nestlé’s ability to adapt to changing consumer preferences, especially in health and wellness products, has contributed to its robust market performance and long-term shareholder value.
Objective : To find out Beta of Nestle and its significance.
Data collection : Data for Nifty 50 and Nestle was downloaded from NSE website, for the period 1st April,2023 to 31st March 2024.Data was manipulated for friday closing price and its weekly return calculate by formula (Yt-1 – Yt)/Yt×100.
Weekly return Nestle were regress on weekly return of Nifty 50.
Data Analysis :
Weekly return of Nestle = -1.93+0.98 (weekly return of Nifty 50)
N = 48,
R2 = 0.54,
F = 53.38,
P-Value = 3.59
The above equation shows the relationship between Nifty 50 and Nestle. The positive sign before 0.98, means if Nifty 50 rises Nestle will also rise.
The coefficient of Nifty 50 has T stat = 7.31
P value of which is = 3.59, it is more than 0.05 , meaning Nifty 50 is not statistically significant to increase price of Nestle.
R2 = 0.54 meaning 5.4% Of Nestle price are explained by Nifty 50 99.9% depends opon
other factors like fundamentals are other factors.
F is 53.38 and P value is 3.59 meaning it is more than 0.05 meaning the overall model is not statistically significant.
Conclusion : 0.98, it is less than 1. Neslte is good for long term investment.