Problem Title:
To determine RELATIONSHIP OF Nifty and Sanofi India Ltd.

Author – Srestha Datta

INTRODUCTION OF COMPANY

Sanofi India Limited is one of the entities through which Sanofi operates in India. It was incorporated in May 1956 under the name Hoechst Fedco Pharma Private Limited. Over the years, its name was changed to Hoechst Pharmaceuticals Private Limited, Hoechst India Limited, Hoechst Marion Roussel Limited and Aventis Pharma Limited. Today, it employs more than 3,000 employees across India.

Sanofi, one of the world’s leading healthcare companies, and its 100% subsidiary – Hoechst GmbH, are the major shareholders of Sanofi India Limited and together hold 60.4% of its paid-up share capital.

OBJECTIVE

To calculate beta of company and find its significance

Data Collection:

Data was collected from the NSE Website which comprises of historic data for the past 1 year. The Friday of each week of the year was taken into consideration. The resultant was calculated and regression was performed on the data.

Data Analysis:

We know Y= a +bx1

Where b is the beta value.

H0 – Null Hypothesis

H1 – Alternate Hypothesis If the beta coefficient is significant, the interpretation is that for every 1-unit increase in the predictor variable, the outcome variable will increase by the beta coefficient value.

It was found that R Square is 2.8%, the regression Equation was found to be
Y= 0.2799+ 0.11023X

Here Beta value is 0.11023

SUMMARY OUTPUT

Regression Statistics

Multiple R
0.168458
R Square
0.028378
Adjusted R Square
0.006296
Standard Error
3.248514
Observations
46
Interpretations:

We can see that the R square value is 0.028378, which means that Nifty can explain 0.28 % of the weekly returns of Sanofi India Ltd. Because the proportion is smaller, we may deduce that Sanofi India Ltd. does not follow the Nifty trend.

Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
0.279942
0.313935
0.89172
0.377394
0.35275
0.912637
0.35275
0.912637
X Variable
0.110235
0.097241
1.133626
0.26309
0.08574
0.306211
0.08574
0.306211
We can observe here that the Beta value is 0.11023 meaning that 1 unit change in Nifty leads to 0.11023 change in weekly returns of Sanofi India Ltd. We also need to note that the value is beta is positive indicating the presence of a positive relationship between the two variables.
ANOVA
df
SS
MS
F
Significance F
Regression
1
13.56155
13.56155
1.285109
0.26309
Residual
44
464.3252
10.55284
Total
45
477.8867
H0: Nifty is not influencing the weekly returns of Sanofi India Ltd.
H1: Nifty is influencing the weekly returns of Sanofi India Ltd.
Here as the F value is 1.285109 which is less than 4, thus we can accept the null hypothesis and reject the alternate hypothesis, concluding that nifty is not influencing the weekly returns of Sanofi India Ltd.
Also, the Significance F value is 0.26309 which is more than .025 thus the model is not significant.