Business Research Methodology
NIFTY- SUN
Submitted By:- Somya Sogani
Division :- B
Sap Id:- 80012100604
Title:- Relationship of Nifty and Sun Pharma
Author:- Somya Sogani
Introduction
Sun Pharmaceutical Industries Limited (Sun Pharma) is an Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra, that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients in more than 100 countries across the globe. It is largest pharma company in India and the fourth largest specialty generic pharmaceutical company in the world, with a total revenue of over US$4.5 billion as of June 2021. It was founded by Dilip Sanghvi in 1983 in Vapi, Gujarat with five products to treat Psychiatry ailments.
Over 72% of Sun Pharma sales are from markets outside India, primarily in the United States. The US is the single largest market, accounting for about 30% of the company’s turnover; in all, formulations or finished dosage forms, account for 93% of the turnover. Manufacturing is across 44 global locations in India, the US, Asia, Africa, Australia and Europe. In the United States, the company markets a large basket of generics, with a strong pipeline awaiting approval from the U.S. Food and Drug administration (FDA).
Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times. The founding family continues to hold a majority stake in the company.
Objective:-
To calculate Beta value of Sun Pharmaceuticals Limited and find its significance
Views and Reviews:-
Shares of Sun Pharma gained as much as 5.43% as of 11 a.m. on Tuesday. Of the 39 analysts tracking the drugmaker, 34 have a ‘buy’ rating, three suggest a ‘hold’ and two recommend a ‘sell’, according to Bloomberg data. The 12-month consensus price target implies an upside of 9.9%.
Data Collection:-
The data of NIFTY and Sun Pharma was collected through NSE Website and was downloaded from 5th March 2021 to 25th February 2022 in an excel sheet. The closing prices were found out. The data was filtered on weekly basis and then weekly returns of both NIFTY and SUN Pharma was calculated. The company’s returns have been regressed on nifty’s returns. Other information regarding the Company’s growth, share price has been taken from Bloomberg website.
Data Analysis:-
Predicted Y = 0.579708 + 0.595332 X
N=47, R Square= 0.122555, F= 6.145595
T stat(beta) = 2.479031
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 the 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 0.595332 units.
T calculated is more that T tabulated which means, β is statistically significant at 5% confidence level.
R^2 is 0.122555 which means 12% of Y (Sun Pharma) is explained by X. And the balance is explained by error.
F is 6.145595 which is more than table value which means model is statistically significant at 5% level.
Conclusion:-
β is statistically significant in case of NIFTY and Sun Pharma.