Title: Relationship of Cipla Limited Company with Nifty-50
Author – Chanchal Suresh Sambare
Introduction
Cipla is a leading pharmaceutical from India with presence across the world. It was established in 1935 as Chemical Industrial & Pharmaceutical Laboratories Ltd and changed to its current name in 1984. The company has a vast portfolio with more than 1,500 products in the market.
Cipla Limited is an Indian multinational pharmaceutical company, headquartered in Mumbai, India. Cipla primarily develops medicines to treat respiratory, cardiovascular disease, arthritis, diabetes, weight control and depression; other medical conditions
Cipla sells active pharmaceutical ingredients to other manufacturers as well as pharmaceutical and personal care products,[21] including escitalopram oxalate (anti-depressant), lamivudine, and fluticasone propionate.[4] They are the world’s largest manufacturer of antiretroviral drugs.
Objective
Calculate the Beta of the “Cipla Company” and see its significance.
Data collection
We have downloaded the data of Cipla Limited and Nifty-50 dated from 1st April 2021 to 31st March 2022 from the website of National Stock Exchange. The data for this period, Nifty equity is downloaded by CSV file. Firstly, we have taken the data and after deleting all the column except date and closing stock we have added the weekday column in the data using weekday function of excel. Then we have added another column named as Return Column named as X for nifty and same Y for equity which will be regression.
Data analysis
Equation in the form of Y= a + b(X)
Y= Cipla Limited company (Equity)
X = Nifty- 50 Returns
a = intercept and b = slope
Hence the equation,
Y = 0.27571 + (-0.09261) X
Cipla Returns = 0.27571+(-0.09261) *(Nifty 50 Returns)
(-0.36479)
N= 44, R2 = 0.0031 and F = 0.1331
Conclusion
The above equation tells us the relationship between X & Y. IF X rises by 1 unit, Y will fall by (-0.0926) and vice versa given figure (-0.3647) is the t stat for b. The p-value for which is (0.7170) which is greater than 0.05 which means b is statistically insignificant at 5% level. R^2 is (0.0031) which means 0.31% of y is explained by X. F is (0.1331) and p value for which is (0.7170) which is greater than 0.05 it means overall model is statistically insignificant at 5 % level.