Title: Relationship of Sun Pharma Ltd. With Nifty 50
Author: Shruti Bhadange
Roll No. 21230023227
Batch – F2
Introduction
Sun Pharmaceutical Industries Limited is an Indian multinational pharmaceutical company headquartered in Mumbai, that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (API) in more than 100 countries across the globe. It is the largest pharmaceutical company in India and the fourth largest speciality generic pharmaceutical company in the world. The products cater to a vast range of therapeutic segments covering psychiatry, anti-infectives, neurology, cardiology diabetology, gastroenterology, ophthalmology, nephrology, urology, derma logy, gynaecology, respiratory, oncology, dental, and nutritional’s. Its active pharmaceuticals, products include baricitinib, brivaracetam and dapagliflozin. 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.
Objectives:
To calculate Beta and find its significance.
Views and Reviews
Sun pharma witnesses surge in trading volume. Last traded price 1180.9, Market capitalization: 283337.47, Volume: 2246320, Price-to-earnings ratio 33.14, Earnings per share 35.63. The comprehensive coverage combines fundamental and technical indicators to provides with a comprehensive view of Sun Pharmaceutical Industries’ performance. In the US., the sun pharma company is among the top 10 generic pharmaceutical companies and are ranked second by prescriptions in the generic dermatology market.
Data Collection.
Data was downloaded from nseindia.com for 1/10/2022 to 30/9/2023 for Nifty as well as for Sun pharma. All the columns were deleted for both the sheets except date and closing price and. The closing price on Fridays were identified for Nifty and Sun Pharma ltd. The weekly returns for Nifty (denoted as X) and Equity (denoted as Y) were then computed. A linear Regression analysis was performed on the weekly returns of Nifty (X) and Sun pharma (Y).
Data Analysis
The regression equation has the form:
Y = a + b*x
Where, Y is the dependent variable.
X is the independent variable
a is the intercept.
b is the slope
In our case, Sun Pharma is the dependent variable and Nifty 50 is the independent variable
Intercept, a = -0.250339481
Slope, b = 0.487569224
R square = 0.102387086
F = 0.025005044
So, the regression equation is.
Y = -0.250339481 + 0.487569224*X
The regression analysis reveals a noteworthy association between the dependent and independent variable, as evidenced by an R square of 10.24%, indicating that 10.24% of the variability in the dependent variable is accounted for by the independent variable. The model’s F- statistic, standing at 5.36, underscores its overall statistical significance. Specifically examining the intercept, a non-significant p-value of 0.40 accompanies the coefficient of -0.25. Meanwhile, for X variable 1, the coefficient is 0.49 with a statistically significant p-value of 0.0025. This suggests that a one unit increase in X variable 1 corresponds to a 0.49 unit increase in the dependent variable. The 95 % confidence interval for X variable 1 spans from 0.06 to 0.91. Although the model demonstrates statistical significance, it is important to note that the practical significance and explanatory power remain relatively modest.
CONCLUSION
Beta is 0.487569224 which is less than 1, it means Sun Pharmaceutical’s ltd, is better for long term investment.
REFERENCE