Relationship of Apollo Hospitals Enterprise Limited with Nifty 50 and to calculate beta (β).
Author: Akanksha Bhat
Introduction:
Apollo Hospitals Enterprise Limited is the first group of hospitals that pioneered the concept of corporate healthcare delivery in India. They are a leading private sector healthcare provider in Asia and own and manage a network of specialty hospitals and clinics, a chain of Pharmacy retail outlets across the country, and provide consultancy services for commissioning and managing the specialty hospitals. Services offered by the company include;
- Cardiology and Cardiothoracic Surgery
- Orthopedics and Joint Replacement Surgery
- Spine Surgery
- Oncology
- Medical and Surgical Gastroenterology
- Neurology and Neurosurgery
- Nephrology & Urology & Critical Care Medicine
Objective:
To calculate the beta (β) of Apollo Hospitals Enterprise Limited and see its significance.
Review of Literature:
- Agarwal et.al., 2020 studied that with a population of more than 1.3 billion people, our country, India, has a rapidly growing need for health care. Along with a widespread increase in the incidence of cancer, diabetes, and cardiovascular disease, the nation also is suffering from a shortage of health-care professionals. Apollo Hospitals Enterprise Limited has introduced the use of robotic surgery and artificial intelligence (AI) which has allowed medical practitioners to provide more personalized health care to patients, increased the efficiency of doctors by removing repetitive tasks and facilitated a shift toward prevention of serious illnesses. An analysis of the opportunities and challenges posed by the technologies employed at Apollo Hospitals’ facilities highlights the promise of AI in the health-care field and the obstacles yet to be overcome.
- Kaur et.al., 2016 found out that medical tourism is the act of travelling abroad in search of medical care, which has reformed the traditional health-care industry and has set a new benchmark for every country around the globe. India is emerging as a prime destination because Indian hospitals are well-equipped with the latest technology and have highly qualified and experienced staff that can provide timely and quality medical treatment to the patients. Therefore, the present study highlights the growth entrepreneurship in medical tourism industry in India. The study analyzed three chains of hospitals in India, namely Apollo hospitals, Fortis healthcare, and Max healthcare, providing medical care to the medical tourists. The results depict that these hospitals are providing world class medical care to foreign patients and the lower costs of treatments, high quality of care, sophisticated infrastructure, and state of-the-art technology used by the Indian medical service providers is playing an important role in improving medical tourism in India.
Data Collection:
The data for Nifty 50 and Equity of Apollo Hospitals Enterprise Limited has been downloaded from nseindia.com from the period 1st November 2022 to 31st October 2023. The data was analyzed to find out the Friday closing prices of Nifty 50 and Equity of Apollo Hospitals Enterprise Limited viz; as Weekly Returns of NSE index Nifty 50 as ‘X’ and Weekly Returns of Equity of Apollo Hospitals Enterprise Limited on NSE as ‘Y’.
Wherein, ‘Y’ (Equity of Apollo Hospitals Enterprise Limited) was regressed on ‘X’ (Nifty 50) and a relationship between the two was plotted.
Data Analysis:
Data Equation of ApolloHosp shares = 0.1542+0.874 nifty,
Where, n = 48, R2 = 0.165, F = 9.335
The above equation shows the relationship of Equity of Apollo Hospitals Enterprise Limited with Nifty 50.
If nifty rises by 1 unit, ApolloHosp will rise by 0.874 units.
t-stat for beta (β) is 3.055 and the p value is 0.00369 which is less than 0.05. So, b≠0, meaning Nifty impacts Equity of Apollo Hospitals.
R square is 0.165; meaning 16.5% of Apollo Hosp shares is explained by Nifty, meaning 83.5% of Apollo Hospitals Enterprise Limited (Y) depends on Nifty 50. (X)
F =9.335, and p Value is less than 0.05, so the model is statistically significant at 5% level.
Result:
- As calculated p Value (0.00369) is less than 0.05, so the model is statistically significant at 5% level.
- As b≠0, NSE index Nifty 50 impacts Equity of Apollo Hospitals.
- As calculated R square is 0.165, 83.5% of Y (Equity of Apollo Hospitals) depends upon X (Nifty 50).
Conclusion:
As beta (0.874) is less than 1, the company is good for long term investment.
References:
- Agarwal, Y., Jain, M., Sinha, S., & Dhir, S. (2020). Delivering high‐tech, AI‐based health care at Apollo Hospitals. Global Business and Organizational Excellence, 39(2), 20-30.
- Kaur, P. (2016). Entrepreneurship in medical tourism industry. Int J Inf Mov, 1(5), 22-5.