Title: Relationship of Sun Pharmaceuticals with Nifty

Author: Siya Sunilkumar

Introduction: Sun Pharmaceuticals is the world’s fourth largest speciality generic pharmaceutical company and No. 1 in India. We provide high-quality, affordable medicines trusted by customers and patients in over 100 countries. Sun Pharma’s global presence is supported by more than 40 manufacturing facilities spread across 5 continents, R&D centres across the globe and a multi-cultural workforce comprising over 50 nationalities. Sun Pharma fosters excellence through innovation supported by strong R&D capabilities comprising around 2,000 scientists and R&D investments of over 7-8% of annual revenues. It was founded by Dilip Sanghvi in 1983 in Vapi, Gujarat.

Objective:-
To calculate the Beta value of Sun Pharmaceuticals Limited and see its significance.

DATA COLLECTION

Data was taken from nifty. Friday closing price was calculated.

Data Analysis:-

Estimated Y = 0.579710 + 0.595334 X
N=47, R Square= 0.122555, F= 6.145600
T stat(beta) = 2.479034
T stat (0.05,45) = 2.0141
The above regression equation tells us the relationship between X and Y. Where X is NIFTY’s weekly returns and Y is Sun Pharma’s weekly returns.
The positive sign of Beta tells us that there is a positive relationship between NIFTY and Sun Pharma’s weekly returns.
From the equation, it can be seen that if X rises by 1 unit, Y will rise by 0.595334 units.
T calculated is more than T tabulated which means, β is statistically significant at a 5% confidence level.
R^2 is 0.122558 which means 12% of Y (Sun Pharma) is explained by X. And the balance is explained by error.
F is 6.145597 which is more than the table value which means the model is statistically significant at a 5% level.

Conclusion:-
β is statistically significant in the case of NIFTY and Sun Pharma. It is a good model.