AUTHOR: SRISTI AGARWAL ( FINANCE- 1)
21230023599
INTRODUCTION: Syngene is a contract research, development and manufacturing organization (CRDMO) that provides integrated discovery, development, and manufacturing services to pharmaceutical, biotechnology, animal healthcare, consumer goods and agrochemical companies.
Syngene’s clients are world leaders in their fields, ranging from leading global multinationals to small and medium-sized start-ups, non-profit institutions, academic institutes and government organizations.
OBJECTIVE OF THE REPORT –
To Calculate Beta and its significance of the equity stock of SYNGENE.
VIEWS and REVIEWS :
- Syngene is dedicated to advancing the fields of Life Sciences, Molecular biology, Genomics, and Proteomics through our cutting-edge image analysis technology.
- range of products, including gel documentation, fluorescence, and chemiluminescence imaging equipment, is designed to meet the highest standards set by regulatory agencies and accreditation bodies.
- commitment to providing the best products, such as our instant gel documentation and automated chemiluminescence, is unwavering.
- “Syngene International is a leading India-based contract research and manufacturing organization that supports R&D programs, from lead generation to clinical and commercial support”.
- Jonathan Hunt
(CEO of Syngene International)
–
PROCEDURE FOR DATA COLLECTION
First I logged on to NSE official website www.NSEindia.com. Then I clicked on historical data via (https://www.nseindia.com/Indices/IndexArchiveData.html). Then I selected the period from 01st Nov 2022 to 31st Oct 2023 then clicked apply and downloaded the CSV file of the price of the NSE index.
Similar procedure is followed for obtaining the data of data of syngene limited for the period 01st Nov 2022 to 31st Oct 2023.
After downloading the CSV Files of both the NSE index and SYNGENE share price I proceeded to calculate beta of the stock of SYNGENE limited.
PROCEDURE FOR DATA ANALYSIS
For calculating the weekly returns of the stock and the NSE index, I selected the closing price of every last day of the trading week i.e. Friday
For arriving at the last day of the week I applied the formula =Weekday(cell value,2) then it returns the days signifying: 1 for Monday 2 for Tuesday likewise 5 for Friday , I kept only the no 5 denoting Friday and deleted the rest data for the purpose.
On performing the above mentioned procedure, we are left with three columns first being date column 2nd being closing prices of the stock and 3rd being closing price of the NSE index.
Now we will calculate the corresponding return for each week from the stocks by applying the formula = {(Closing value – Opening Value)/ Opening Value*100}.
Formula used ,
for calculation of Beta = COVARIANCE ( RETURN ON STOCK,RETURN ON MARKET INDEX)/VARIANCE OF MARKET
Beta= COV(Ri, Rm)
VAR (Market)
={Ri – Mean of Ri}{Rm- Mean of Rm}/No of items
{(Rm- mean of Rm )^2}/No of items
Hence on making the above calculations we get the beta for the company = 1.44594 Which is more than 1, that indicates that the company is more volatile in nature hence it is suitable for short term investments.
By applying the anova on the above data obtained we obtained the correlation between the stock and market return 0.593064 which indicates there is POSITIVE relation between the movement of price of stock and market movements.
Data Analysis:
Equation: Y= 0.08703 + 1.445944 x
Interpretation:
The above equation shows the relation between NSE SENSEX and SYNGENE ltd .
The regression equation is in the form of Y = mx + b, where:
- Y represents the dependent variable.
- X represents the independent variable.
Interpreting the coefficients:
- The coefficient is 0.087037 is the intercept of regression line.
- The coefficient 1.44594 is the slope of the regression line. It indicates the change in Y for a one-unit change in X. In this case, for every unit increase in X, Y is expected to increase by 1.44594 units.
- Number of observations are 50.
- 103200 is the t-stat for Y, the p-value for which is 0.0000056674 .
- R square is 0.3517249 This value indicates that approximately 172% of the variability in the dependent variable can be explained by the independent variables in the model.
- The ANOVA table shows the analysis of variance. The regression has a significant value of F = 5.66741 .This implies that the overall regression model is statistically significant in explaining the variability in the dependent variable.
Conclusion: Beta is 1.445944 which is more than 1, it means that SYNGENE is good for short term investment.
References: