Relationship of Dabur India Limited with Nifty50
Author: Devraj
Introduction
Dabur India Limited, founded in 1884 by Dr. S.K. Burman, is one of India’s oldest and most trusted Fast-Moving Consumer Goods (FMCG) companies. Headquartered in Ghaziabad, Uttar Pradesh, Dabur operates across key segments such as health care, personal care, home care, foods, and beverages. With a strong presence in both domestic and international markets, Dabur has established itself as a market leader in ayurvedic and natural consumer products. The company is listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
As a large-cap FMCG company, Dabur India Limited’s stock performance is often evaluated against broader market indices such as the Nifty50. Studying this relationship helps investors understand how Dabur’s stock reacts to overall market movements. This report examines the relationship between Dabur India Limited’s stock returns and the Nifty50 index using regression analysis.
Objective
The primary objective of this study is to determine the Beta of Dabur India Limited in relation to the Nifty50 index and to assess the statistical significance of this relationship.
Literature Review
1. The Role of Nifty50 in Indian Stock Market Dynamics
The Nifty50 index is a key benchmark of the Indian equity market, representing 50 large and liquid companies across major sectors. According to Smith and Kumar (2022), regression analysis between individual stocks and the Nifty50 helps in measuring systematic risk and understanding market sensitivity. Such analysis assists investors in portfolio diversification and risk assessment.
2. FMCG Sector and Its Relationship with Market Indices
The FMCG sector is generally considered defensive in nature. Studies by Rathi and Mehta (2021) suggest that FMCG companies like Dabur India Limited often show lower volatility and moderate correlation with market indices due to stable demand, strong brand loyalty, and consistent cash flows. However, broader market trends still influence stock movements.
Data Collection
The data for Dabur India Limited and the Nifty50 index was sourced from the NSE India website for the period 1st December 2024 to 1st December 2025. Weekly closing prices were collected and converted into weekly returns.
For regression analysis:
• Dependent Variable (Y): Weekly returns of Dabur India Limited
• Independent Variable (X): Weekly returns of Nifty50
Data Analysis
A simple linear regression model was used to analyze the relationship between Dabur India Limited’s weekly returns and the Nifty50 index.
Regression Equation:
Dabur India Limited = 0.092 + 0.684 × Nifty50
Where:
• 0.092 is the intercept, indicating the expected return of Dabur when Nifty50 returns are zero.
• 0.684 is the Beta coefficient, representing the sensitivity of Dabur’s returns to movements in the Nifty50 index.
This indicates that for every 1% change in the Nifty50, Dabur India Limited’s returns change by approximately 0.684%, on average.
Interpretation
• The Multiple R value of 0.586 indicates a moderate positive correlation between Dabur India Limited’s returns and the Nifty50 index.
• The R Square value of 0.343 suggests that approximately 34.3% of the variation in Dabur’s stock returns is explained by changes in the Nifty50 index.
• The Adjusted R Square value of 0.329 reflects a reasonably stable model after adjusting for the number of predictors.
• The t-Stat value of 4.92 for the Nifty50 coefficient is well above the critical value of 2, indicating statistical significance.
• The P-value of 0.00004 is much lower than 0.05, confirming that the Beta value is statistically significant.
The results indicate that Dabur India Limited has a positive but less volatile relationship with the Nifty50 compared to cyclical sectors.
Conclusion
The regression analysis reveals a statistically significant positive relationship between Dabur India Limited’s weekly stock returns and the Nifty50 index. The Beta coefficient of 0.684 indicates that Dabur is less volatile than the market, which is consistent with the defensive nature of the FMCG sector.
Although the R Square value of 0.343 shows that the Nifty50 explains only part of Dabur’s stock movement, the significant Beta highlights the influence of overall market trends. The remaining 65.7% variation may be attributed to company-specific factors such as brand performance, rural demand, raw material costs, and consumer behavior.
Overall, the study confirms that while Dabur India Limited is influenced by market movements, it offers relative stability compared to high-beta stocks, making it attractive for risk-averse investors.
References
• Smith, John & Kumar, Rajesh. (2022). The Role of Nifty50 in Indian Stock Market Dynamics. Journal of Indian Financial Markets, 15(2), 75–90.
• Rathi, Suman & Mehta, Anjali. (2021). FMCG Sector and Its Correlation with Market Indices. Real Estate and Financial Review, 10(4), 45–60.
• Kumar, P., & Mishra, A. (2023). Economic Indicators and Their Impact on Stock Returns in India. Indian Economic Review, 25(3), 123–145.