Title-Relationship of Sun Pharma with Nifty Fifty to calculate Beta.
Author-Saloni.S.More
Introduction
Sun Pharma is the world’s fourth largest specialty generic pharmaceutical company and No. 1 in India. It provides 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-culturalworkforcecomprising 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.
Objective-To calculate Star Health and see its significance.
Literature Review-
1-Performance Assessment of Pharmaceutical Company- A Case Study on Sun Pharmaceutical Industries Ltd.
India is the largest supplier of generic drugs in the world. India’s pharmaceutical sector supplies more than 50% of the global demand for various vaccines, 40% of the general demand . Globally, India ranks 3rd in pharmaceutical production by volume and 14th in value. The national pharmaceutical industry consists of a network of 3,000 pharmaceutical companies and about 10,500 manufacturing units. India occupies an important position in the world pharmaceutical industry. There are many firms which contributed in the success of Indian pharmaceutical industry and among them Sun Pharmaceutical Ltd. hold an important position. Sun pharmaceutical industries Ltd. is largest pharma company in India and the fourth largest generic pharmaceutical company in the world with global revenues of over US$ 4.5 billion. Over 72% of Sun Pharma’s sales come from markets outside of India, primarily the United States. The objective of this study is to assess the overall financial performance of the Sun Pharma Ltd. From the analysis of financial performance of Sun Pharma Ltd. through ratio analysis over the study period 2016-17 to 2020-21 it is found that all the liquidity, profitability (except-2021), efficiency ratios had gradually improved over the study period; but operating cash flow position to be improved by reduction of non operating expenses, collection efficiency to be improved and company can take cheaper debt capital facility to improve earnings per share. From the above analysis we may conclude that Sun Pharma Ltd. liquidity position had gradually improved, but operating cash flow position to be improved by reduction of non operating expenses, which had impact in Net Profit ratio also; receivable collection should also be increased to improve operating cash flow and net profit margin. To conclude company can take cheaper debt capital facility to improve earnings per share.
2- Corporate Restructuring in India: A Case Study of Sun Pharmaceutical Industries Limited
Corporate restructuring is the partial dismantling or re-organizing a company for the plan of making it more efficient, competent and more profitable. The purpose of corporate restructuring is to conduct business operations in more efficient, effective and competitive manner in order to improve the organization’s market value of share, brand power and synergies. In 2003–04, 834 mergers and acquisitions deals involved Rs 35,980 crore in India. . To conclude there are several benefits due to this.
Data Collection-The data for Nifty and Eqity of Sun Pharma has been downloaded from nseindia.com and finance.yahoo.com from 1st November ,2022 to 31st October ,2023.Data was manipulated to calculate the Friday Closing Price.
Data Analysis
Sun Pharmaceuticals shares= 1922.83+0.9nifty
n= 44, R square= 0.03 , F= 1.7381
The above equation shows relationship of Sun pharmaceuticals with Nifty If nifty rises by 1unit,
t-stat for b is 1.318 and the p value is 0.19 which is more than 0.03 so b=0, meaning nifty does not impact Sun pharmaceuticals shares
Rsquare is 0.04, of sun pharmaceuticals share is explained by nifty, meaning 97% depends upon other things like fundamental .
F= 1.738, and p vaule and p value is more than 0.05 so the model is not stastistically significant at 5% level. Conclusion= As beta is (0.995) is less than 1, so its good for long term investment.
Reference-
- Deepikadhingra And Nishi Aggarwal (2014), “Corporate Restructuring in India: A case study of Reliance Industries Limited”,
- Global Journal of Finance and Management Volume 6, Number 9 (2014), Page 813-820. ICSI (2016), “Corporate Restructuring valuation .