Title: Relationship of Sula Vineyards with Nifty50
Author: Snehal Mohite
Roll no 35, Div -A
Introduction:
Sula Vineyards, founded in 1999, is India’s leading wine producer and a pioneer in the country’s modern winemaking industry. Based in Nashik, Maharashtra, Sula is renowned for its premium wines, including Sauvignon Blanc, Chenin Blanc, and Shiraz. The company has played a crucial role in making wine culture more accessible in India and has a strong presence in both domestic and international markets. With a commitment to quality, sustainability, and innovation, Sula continues to shape the Indian wine industry.
Objective:
The primary objective of this study is to determine the beta value of Sula Vineyards in relation the Nifty 50 index. Beta is a measure of the stock’s volatility compared to the market.
Literature review:
· Sula Vineyards, India’s leading premium wine producer, has achieved significant growth through market leadership, sustainability initiatives, and business diversification. The company has implemented eco-friendly practices such as solar energy, water conservation, and waste recycling. To expand revenue streams, Sula ventured into wine tourism, beverage distribution, and urban wine bars. While its rapid expansion led to financial challenges, private equity investments helped sustain growth. Theoretical models like the Triple Bottom Line and Porter’s Five Forces highlight Sula’s strategic approach. Future research could explore the long-term impact of sustainability and wine tourism on profitability. (Raymond Horez)
· Sula has become a pioneer brand which not only changed the consumption pattern of Indian alco-beverage market but also led to acceptance of wines in Indian scenario. Sula Vineyards is also a leader in sustainable winemaking and has created direct and indirect employment opportunities for thousands of rural youths. It has positioned itself globally as India’s largest and leading wine producer. The case exhibits how well-planned brand-building strategies can make an unacceptable product acceptable in the market. It clearly exhibits various strategies adopted by Samant in building Sula wines, a brand to reckon with. This includes an exploration of the mindset of consumers to strategically place new product among the existing pallet of choice. ( Swati Singh and Pallavi Shrivastava)
Data collection:
Sula Vineyards and NIFTY50 data was downloaded for period 1-1-24 to 31-12-24 and data was manipulated to find out the Friday closing prices were calculated of NIFTY50=X and Shoppers Stop=Y, Y was regression on X.
Data Analysis:
The regression equation describes the relationship between the Nifty 50 (X) and the Sula share price (Y). This indicates that the Sula share price is the dependent variable, while the Nifty 50 is the independent variable. The coefficient of -0.300393 suggests that for every 1% increase in the Nifty 50’s weekly return, Sula’s weekly share price return is expected to decrease by approximately 0.300%.With 47 observations, the model’s R-squared value is 0.093379, implying that approximately 9.34% of the variation in Sula’s weekly share price returns can be explained by changes in the Nifty 50’s weekly returns, while the remaining 90.66% is attributed to other factors not included in the model. The p-value for the slope is 0.036726, which is lower than the conventional threshold of 0.05, indicating that the relationship between the Nifty 50’s weekly returns and Sula’s weekly share price returns is statistically significant at the 5% level. Consequently, this model provides evidence of a significant negative linear relationship between the Nifty 50’s weekly returns and Sula’s weekly share price returns, suggesting that market movements have a measurable inverse impact on the company’s share price returns.
Equation – -0.0538+(-30039X)
Conclusion:
The analysis shows a weak but significant negative relationship between the Nifty 50 and Sula’s share price, with only 9.34% of price movements explained by market fluctuations. While the inverse correlation is statistically significant, other factors like industry trends and company performance play a larger role.
References:
· Swati Singh & Pallavi Srivastava, 2018. “Sula Wines: A Foray into Uncharted Territory,” South Asian Journal of Business and Management Cases, , vol. 7(1), pages 11-20, June.
· TY – JOUR AU – Lopez, Raymond PY – 2016/04/16 SP – 79 EP – 98T1 – Sula Vineyards (B) – Sustainable Growth?VL – 1DO – 10.26813/wbcrj/2016.01.01/sulaJO – Wine Business Case Research Journal