Title: Relation of Dabur India Limited with Nifty50
Author: Darshan Vaidya
Introduction:
Dabur India Limited is one of the leading FMCG (Fast Moving Consumer Goods) companies in India, specializing in Ayurvedic and natural healthcare products. Founded in 1884 by Dr. S.K. Burman, Dabur has grown into a multinational corporation with a strong presence in health supplements, hair care, oral care, skin care, home care, and food & beverages. The company is widely recognized for its flagship brands, including Dabur Chyawanprash, Dabur Honey, Vatika, and Real Juices. With an extensive distribution network across India and international markets, Dabur continues to expand its market share while maintaining a commitment to natural and sustainable products.
Objective:
To find out the Beta of Dabur India Limited and its significance in relation to Nifty50.
Literature Review:
Impact of FMCG Sector on Economic Growth
Sharma & Gupta (2021) analysed the contribution of the FMCG sector to economic growth in emerging markets. The study highlights how increased consumer spending on daily-use products drives GDP growth. It also discusses the role of rural penetration in expanding the market size for FMCG companies. The findings emphasize that companies with strong brand loyalty and diverse product portfolios tend to outperform market trends.
Stock Market Performance of FMCG Companies
Mehta & Rao (2019) examined the relationship between FMCG stock performance and market indices. The study found that FMCG stocks tend to be less volatile compared to other sectors due to their defensive nature. Companies like Dabur, HUL, and ITC exhibit stable growth patterns with consistent dividend pay-outs, making them attractive to long-term investors.
Data Collection:
Dabur India Limited and Nifty50 data were downloaded for the period from 01-01-24 to 31-12-24. The Friday closing prices of Nifty50 (X) and Dabur India Limited (Y) were extracted. Y was regressed on X to establish a statistical relationship.
Data Analysis:
Equation: Dabur India Limited = -0.40 + 1.01 Nifty50
Interpretation:
The regression equation describes the relationship between Nifty50 (X) and Dabur India Limited share price (Y), where the dependent variable is Dabur India’s share price, and the independent variable is Nifty50. The coefficient of 1.01 suggests that for every unit increase in Nifty50, Dabur India Limited’s share price is expected to increase by 1.01 units. With 47 observations (N = 47), the R² value is 0.26, indicating that 26% of the variation in Dabur’s share price can be explained by Nifty50. The F-value for the model is 15.62, and the p-value for the slope is 0.00, which is highly significant at the 5% level. This suggests that there is a statistically significant positive relationship between Nifty50 and Dabur India’s share price. However, since R² is relatively low (26%), other factors beyond Nifty50 also influence Dabur’s share price. The intercept of -0.40 is not statistically significant (p = 0.34), meaning it does not contribute meaningfully to the model. The 95% confidence interval for the coefficient (0.49 to 1.52) suggests that the true effect of Nifty50 on Dabur’s share price is likely within this range. While the model is significant overall, incorporating additional variables may improve its explanatory power.
Conclusion:
Dabur India Limited’s beta of 1.01 indicates that it is high volatile than the market, making it a suitable investment for risk-averse, short-term investors.
References:
Sharma, A., et al (2021). “Impact of FMCG Sector on Economic Growth in Emerging Markets.” Journal of Business Studies, 34(2), 112-128.
Mehta, P., et al (2019). “Stock Market Performance of FMCG Companies: A Comparative Study.” International Journal of Financial Research, 45(3), 77-94.