Relationship of NIFTY 50 With Vadilal Industries Ltd.
Author: Vineet Gangasagar
Introduction:
Vadilal Industries Ltd. is a leading Indian company known for its diverse range of products in the food and beverage industry. Established in 1907, the company has built a strong reputation in the frozen foods, ice cream, and dairy sectors. Vadilal is recognized for its innovative approach to product development and its extensive distribution network, both domestically and internationally. With a commitment to quality, the company offers a variety of ice cream, frozen snacks, and ready-to-eat meals that cater to the tastes and preferences of different consumer segments. Vadilal’s continued focus on sustainability and customer satisfaction has helped it maintain a prominent position in the industry.
Objective:
The objective of this study is to determine the beta value of Vadilal Industries Limited relative to the Nifty 50 index. Beta measures the stock’s volatility compared to the market. This analysis will help investors assess the risk associated with Vadilal’s stock and make informed investment decisions.
Literature Review:
Growth of Vadilal Industries
Aakanksha Gandhi grew up surrounded by discussions about the ice cream industry, as her father faced challenges in their family business, Vadilal Enterprises. The company, founded in 1907, started as a fountain soda shop and evolved into a leading ice cream brand, known for its traditional kothi-based ice cream and iconic products like cassata ice cream. By the 1970s, Vadilal was a household name, and by 1989, it was listed on the stock exchange. Today, Vadilal operates as two separate entities: Vadilal Industries (manufacturing) and Vadilal Enterprises (marketing and distribution).Aakanksha, the fourth generation of the family, joined Vadilal in 2018, focusing on nationwide branding and marketing. She has worked to modernize the brand by strengthening its presence in e-commerce and collaborating with influencers. She also launched Vadilal Now For Ever, a dessert café aimed at connecting with younger generations. Vadilal Scoop Shops have expanded to 30 locations in Gujarat and four in Delhi, with plans for a pan-India franchise launch.Under Aakanksha’s leadership, the business has maintained its core values while embracing innovation. In FY23, Vadilal’s manufacturing and marketing operations generated significant revenues of Rs 896 crore and Rs 930 crore, respectively. Aakanksha is committed to transforming the brand while staying true to its legacy.
Performance over the years
Vadilal Industries Ltd, a prominent player in the Indian ice cream and processed foods sector, has demonstrated notable market performance in recent years. As of March 19, 2025, the company’s stock reached an all-time high of ₹5,349, reflecting a remarkable 983.30% increase over the past five years, significantly outperforming the Sensex’s 166.34% growth during the same period. Despite this impressive growth, Vadilal’s market capitalization stands at approximately ₹27.28 billion, positioning it as a small-cap company ranked 7,588th globally. Consequently, Vadilal Industries is not included in the Nifty 50 index, which comprises India’s top 50 companies by market capitalization. Nonetheless, the company’s robust stock performance underscores its strong market position within the fast-moving consumer goods (FMCG) sector.
Data Collection: Data for Vadilal Industries Ltd. And Nifty 50 was downloaded for the period from 1st January 2024 to 31st December 2024. The data was manipulated to calculate the Friday closing prices for both indices. The Nifty 50 was represented as X and Vadilal Industries Ltd as Y.
Data Analysis:
Equation: Vadilal = 0.007 + 1.139 Nifty50
Interpretation:
The regression equation describes the relationship between Nifty50 (X) and Vadilal 's
share price (Y), indicating that Vadilal's share price is the dependent variable, while Nifty50 is the independent variable. The positive coefficient of 1.139 suggests that for every unit increase in Nifty50 ,the Vadilal share price is expected to increase by 1.139 units. With 46 observations (), the value is0.086, implying that approximately 8.6% of the variation in Vadilal's share price can be explained by changes in Nifty50. The F-value for the model is 4.256. The p-value for the slope is 0.045, which is less than the conventional threshold of 0.05. This indicates that the relationship between Nifty50 and Vadilal's share price is statistically significant at the 5% level. Consequently, this model providesevidence to suggest a significant linear relationship between Nifty50 and Vadilal 's share price.
Conclusion:
Vadilal beta of 1.13 indicates that it is more volatile than the market and better suited for short-term investment.
References:
Kumar, S. (2024). Case Study on Gujarat’s New Generations Overcoming the Challenges of Third Generation Company. Integral Review: A Journal of Management, 14(1).
Jagdish, M. (1997). Taking on the Big Boys: Study of Success Stories (Master’s thesis, MICA (Mudra Institute of Communications, Ahmedabad)(India)).