Relationship between Nifty 50 and Britannia Industries Limited
Author – Bharati Dhanraj Malunjkar – 89
Introduction:
Britannia Industries Limited is one of India’s leading FMCG companies, known for its wide range of food products including biscuits, dairy items, bread, and cakes. Established in 1892, Britannia has built a strong brand presence and consumer trust across both urban and rural markets.
As a major player in the fast-moving consumer goods (FMCG) sector, Britannia’s stock performance is often influenced by both company-specific factors and broader market movements. This report analyzes the relationship between Britannia Industries Ltd.’s stock returns and the Nifty 50 index to understand its market sensitivity and risk profile.
Objective:
To calculate Beta and observe its significance.
Literature Review:
1. Market Sensitivity of FMCG Stocks
Recent studies suggest that FMCG stocks tend to be relatively stable compared to other sectors due to consistent consumer demand. However, they still show measurable sensitivity to overall market trends, especially during economic fluctuations.
2. Risk-Return Behaviour in FMCG Sector
Research indicates that FMCG companies like Britannia often have moderate beta values, reflecting balanced risk and steady returns. These stocks are generally preferred by investors seeking stability with moderate growth.
Data Collection:
Data for Nifty 50 and Britannia Industries Ltd was collected from NSE for the period 1/1/2025 to 31/12/2025.
- Weekly closing prices (Friday) were considered
- Returns of Nifty 50 were taken as X
- Returns of Britannia Industries Ltd were taken as Y
- Regression analysis was performed with Y on X
Data Analysis:
Regression Equation:
Y=-0.28+0.99X
Statistical Results:
|
Number of Observations (N): |
49 |
|
R Square: |
0.95 |
|
F Statistic: |
894.7 |
|
P-Value (F): |
3.03E-32 |
|
t-Statistic (Beta): |
29.91 |
|
Beta (B): |
0.99 |
Interpretation:
- The positive beta (0.99) indicates a direct relationship between Nifty 50 and Britannia stock returns.
- If Nifty 50 increases by 1 unit, Britannia stock increases by approximately 0.99 units.
- Beta is very close to 1, meaning Britannia moves almost in line with the market.
- The P-value is extremely small (< 0.05), which means beta is statistically significant.
- R Square = 0.95, which means 95% of Britannia’s returns are explained by market movements, and only 5% is due to other factors.
Conclusion:
Since B ≈ 1, Britannia Industries Ltd shows market-like behaviour.
- It is neither highly aggressive nor defensive
- Suitable for investors seeking stable returns aligned with market trends
- Can be considered a balanced investment option
References:
- NSE India (www.nseindia.com)
- Research studies on FMCG sector performance and market volatility