Relationship of Alkem Laboratories with Nifty 50
Author: Akanksha palaye ( MMS “B”, roll no. 222105) Kohinoor business school, kurla
Introduction:
Alkem Laboratories Limited is a prominent Indian pharmaceutical company established in 1973. Headquartered in Mumbai, it has become a leading player in the industry, specializing in the research, development, manufacturing, and distribution of pharmaceutical and healthcare products. With a global presence across various regions, Alkem offers a diverse portfolio of prescription medicines, generics, and branded formulations. Committed to quality and innovation, the company invests in research and adheres to international standards. Its dedication to corporate social responsibility and sustainability reflects its broader impact on society.
Objective : To calculate Beta of Alkem laboratories & find out its significane its significance
Views and Reviews:
Basudeo N. Singh, Executive Chairman, stated that “The COVID-19 pandemic has led to a health crisis and economic shut downs unprecedented in recent history. While causing immense devastation and disruption, the pandemic is also a powerful reminder of the invaluable role of the pharmaceutical sector in saving lives and enhancing the quality of life for millions. for even as the world came to a brief standstill, healthcare companies stepped up to deliver on their responsibilities of making medicines available to patients.at Alkem, we are proud and humbled to belong to this sector, which has risen to fight the pandemic, ensuring continuity of patient care despite the difficult situation.”
Mr. Sandeep Singh, Managing Director of Alkem laboratories ltd, expressed his enthusiasm , “The global pharmaceutical industry is undergoing a rapid evolution which can be attributed to an array of policy and regulatory changes both in India and globally. While in India, NPPA led price cuts, demonetisation and GST have been the main causes for a reversal of growth rate, pricing pressures from key markets such as the US as well as global regulatory interventions have posed additional challenges. However, vast opportunities await the industry after it has prepared itself for these challenges. To deliver a sustainable growth amidst this evolving landscape, one needs to invest ahead of the curve to not only build upon one’s existing strengthens but also to create new levers of growth.
Data Collection:
We collected weekly closing prices from Nifty.com from 01-07-2022 to 30-06-2023. Then, we calculated the weekly returns for both Nifty 50 (X) and Alkem Laboratories’ equity (Y) using the Friday closing prices. This helped us understand how both Nifty 50 and Alkem Laboratories performed each week during this time.
Data analysis:
We can write the equation in the form of Y = a + bx
= 0.193 + 36.13x
(1.440)
N=50
R2 = 0.0414
F = 2.074
Interpretation : The above Equation shows the relationship between the Nifty 50 (X) with the Alkem Laboratories (Y). The positive sign means the positive relation. It means that the nifty 50 stock rises then Alkem laboratories stock also rises and vice versa. If nifty 50 rises by 1 unit Alkem laboratories rises by 36.13 units. N means there are 50 observation. T is 1.440, which is less than tabulated T (t..05,48 2.0106). T stat for b is statistically not significant. R2 is 0.0414 which indicates that the 4.14% of Y is explained by X , balance 95.86% is error due to the variable which is not in model. . F is 2.074 which is less than the table value ( F.05, 1,48 4.0420). So, overall the model is not statistically significant @5% level of significance.
Conclusion
- The beta value being greater than 1 indicates that Alkem Laboratories shares are well-suited for short-term investment.