Title: Relation of Suven Pharmaceuticals with Nifty 50.
Author: Sejal S. Divekar
Introduction: Suven Pharma is a contract drug development and manufacturing services partner, built on more than 33 years of research, innovation, quality, and innovative technology capability. They are pioneer in contract research and manufacturing Services (CRAMS) Business Offering research to execution services with over 880 projects executed, having strength of 400+ scientists, of which 35 are PhD holders. Suven Pharma is a trusted name and the preferred partner of choice for over 25 larger global companies. SUVEN Pharma is a NSE and BSE listed company with strong financials and global leadership for NCEs based intermediates.
Objective: To calculate Beta and find its significance.
Data Collection: Data for Nifty 50 and Suven Pharmaceuticals was downloaded from NSE site for the period 1-3-2023 to 28-2-2024. Friday closing dates were calculated and weekly returns were found out. Weekly returns of Suven Pharmaceuticals were regressed on weekly returns of Nifty 50.
Data Analysis: Suven Pharma return =0.90 – 0.51Nifty 50 return
(-1.56)
n=48
R2=0.0504
F=2.4422
p value=0.1250
Interpretation:
The above equation shows the returns between Nifty50 and Suven Pharmaceuticals. Negative sign shows inverse relationship, if returns of nifty 50 increases, the returns of Suven Pharmaceuticals decreases and vice versa. If nifty 50 returns increase by Rs1, Suven Pharmaceuticals returns decreases by Rs0.51and vice versa. T stat for b is given in brackets as -1.56 and p value for this is 0.1250 which is more than 0.05 meaning b is not statistically significant at 5% level meaning Nifty 50 return does not play a significant role for Suven Pharmaceuticals return. Number of observations are 48. R2 is 0.0504 meaning 5% of Suven Pharmaceuticals returns is explained by Nifty 50 returns. Balance 95% is error due to the variable not taken in the model. F value is 2.4422, P value for which is 0.1250 which is more than 0.05. So, the overall model is not statistically significant.
Conclusion: Since beta is less than one, Suven Pharmaceuticals is good for long term investment.