RELATIONSHIP OF TATA CONSUMER PRODUCTS LIMITED WITH NIFTY 50
Author: Taniya Yadav
Introduction: TATA CONSUMER PRODUCTS LIMITED
Tata Consumer Products Limited (TCPL) is a leading fast-moving consumer goods (FMCG) company in India, formed in 2020 through the merger of Tata Global Beverages and the consumer products business of Tata Chemicals. With a strong presence in beverages and foods, TCPL owns iconic brands such as Tata Tea, Tata Salt, and Tetley, operating across more than 40 countries. The company is listed on the NSE and BSE, and its stock is a part of the NIFTY 50 index, reflecting its prominence in the Indian market. TCPL focuses on innovation, sustainability, and premiumization strategies, positioning itself as a key player in India’s consumer goods sector while expanding globally.
Objective: To find out Beta (β) of TATA CONSUMER PRODUCTS LIMITED and its Significance.
Data Collection:
- I have downloaded the data for NIFTY50 and Tata Consumer Products Limited for the duration of 01-05-2023 to 30-04-2024 from the NSE website. Using this data, I found the weekly closing prices for Fridays. Subsequently, I calculated the weekly returns based on these prices.
- Weekly returns were calculated by the formula,
Y(t+1) – Y(t) / Y(t) * 100
- Weekly return of Nifty was taken as X.
- Weekly return of Tata Consumer Products Limited is taken as Y.
- Y was Regressed on X
Data Analysis:
Regression equation:
Weekly Return of Tata Consumer Products Limited =
Y (Intercept) Tata Consumer Products Ltd + NIFTY 50 (weekly return of nifty)
Relationship of Nifty 50 and Tata Consumer Products Limited = 0.45 + 0.71 Weekly return of Nifty 50
(1.09){t-stat})
N = 48, R-Square= 0.109, F = 5.638, P-value = 0.0218
The above equation shows the relationship between Nifty 50 and Tata Consumer Products Ltd, positive sign before the co-efficient of Nifty 50 tells us that there is a positive relationship if nifty rise by 1unit , company will rise by 0.71 and vice versa.
The figure in bracket is t stats as (1.09) for beta. The p value for which is 0.0218 which is less than 0.05 meaning beta is statistically significant.
For N=48, R-Square=0.109 which means 10.9% of Tata Consumer Products Limited return are explained by Nifty 50. Other (88.3%) are variable explained not in model.
F= 6.106 and P-value for that variable is 0.0218, it is less than 0.05 meaning overall model is statistically significant at 5% level.
Conclusion:
As per the given data of RELATIONSHIP OF TATA CONSUMER PRODUCTS LIMITED WITH NIFTY 50. We know that: β value < 1 and positive, which indicates that the company’s stock exhibits lower volatility compared to the broader market, suggesting that it is less sensitive to market fluctuations.
Consequently, Tata Consumer Products Limited may be considered a stable investment option with lower risk, making it a favorable candidate for long-term investment. Investors may find it advantageous to consider this stock for long-term portfolio growth.