Author name: Harsh Pandit
Introduction :
Hindustan Unilever Limited (HUL) is India’s leading fast-moving consumer goods (FMCG) company, operating in segments like personal care, home care, foods, and beverages. As a subsidiary of Unilever, it has established a strong market presence through innovative marketing, product diversification, and sustainability efforts. This review examines HUL’s business strategies, financial performance, sustainability initiatives, and challenges based on existing literature and research.
Objective :
To determine the beta value of Hindustan Uniliver relative to the Nifty 50 index and assess its statistical significance.
Literature Review :
1. A ‘Desi’ Multinational – A Case Study of Hindustan Unilever Limited.
This case study examines HUL’s strategies for entering the base-of-the-pyramid markets in India. It highlights how HUL adapted its business models to cater to the needs of low-income consumers, emphasizing product affordability, accessibility, and awareness. The study underscores HUL’s success in creating a significant impact in emerging markets through localized strategies.
2. A Study on Financial Performance of Hindustan Unilever Limited. This study analyzes HUL’s financial performance over a five-year period (2017-2018 to 2021-2022). Utilizing ratio analysis and comparative financial statements, the research assesses the company’s profitability, liquidity, and solvency. The findings indicate that HUL maintains a strong financial position with consistent growth in sales and profits, reflecting its robust market presence in the FMCG sector.
Data Collection :
Data for Hindustan Unilever Limited and the Nifty 50 were downloaded from 1 January 2024 to 31 December 2024. The data was manipulated to calculate the Friday closing prices for both indices. The Nifty 50 was represented as X, and Hindustan Unilever Limited as Y. A linear regression analysis was performed, with Y regressed on X.
Data Analysis :
|
Equation : Hindustan Unilever Limited = -0.33905964+ 0.681453738 Nifty 50 |
Interpretation :
The regression equation describes the relationship between the Nifty 50 (X) and the HUL share price (Y). This indicates that the HUL share price is the dependent variable, while the Nifty 50 is the independent variable. The coefficient of 0.6815 suggests that for every 1% increase in the Nifty 50’s weekly return, HUL’s weekly share price return is expected to increase by approximately 0.6815%. With 47 observations, the model’s R-squared value is 0.142, implying that approximately 14.2% of the variation in HUL’s weekly share price returns can be explained by changes in the Nifty 50’s weekly returns, while the remaining 85.8% is attributed to other factors not included in the model. The p-value for the slope is 0.00908, which is lower than the conventional threshold of 0.05, indicating that the relationship between the Nifty 50’s weekly returns and HUL’s weekly share price returns is statistically significant at the 5% level. Consequently, this model provides evidence of a significant positive linear relationship between the Nifty 50’s weekly returns and HUL’s weekly share price returns, suggesting that market movements have a measurable direct impact on the company’s share price returns.
Conclusion :
Since the beta (1.1981) is more than 1, it indicates that Hindustan Uniliver Limited is good for short-term investment.
References :
1. International Journal of Case Studies in Business, IT and Education (IJCSBE), Volume 2, Issue 1, January 2018.
2. International Research Journal of Modernization in Engineering, Technology, and Science (IRJMETS), Volume 5, Issue 4, April 2023