Title: Relationship of Sun Pharmaceutical Industries Limited with Nifty 50
Author: Sakshi Kotian
Introduction: Sun Pharmaceutical Industries limited is an Indian multinational Pharmaceutical company headquartered in Mumbai, that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients in more than 100 countries across the globe. It is the largest pharmaceutical company in India and the fourth largest specialty 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, dermatology, gynecology, respiratory, oncology and dental.
Objective: To calculate Beta and find its significance.
Data Collection: Data for Nifty 50 and Sun Pharmaceutical Industries Limited was downloaded from NSE site for the period 1-3-2023 to 28-2-2024. Friday closing prices were calculated and weekly returns were found out. Weekly returns of Sun Pharmaceutical Industries Limited were regressed on weekly returns of Nifty 50.
Data Analysis: Returns of Sun Pharmaceutical= -0.933 – 0.065 Returns of Nifty 50
(-0.252)
Observations (n)= 48, R Square= 0.001, F= 0.0636, P value = 0.802
The above equation shows the relationship between Nifty 50 and Sun Pharmaceutical Industries Limited, negative sign means inverse relationship. If returns of Nifty 50 rises then the returns of Sun pharmaceutical Industries limited falls and vice versa. If return of Nifty 50 rises by Re 1, return of Sun pharmaceuticals Industries limited will fall by Re 0.065 vice-versa. t Stat for b is given -0.252 and P value for it is given as 0.802 which is more than 0.05 meaning b is not statistically significant at 5% level meaning returns of Nifty 50 does not play a significant role for returns of Sun pharmaceutical Industries limited. Number of observations is 48. R Square is 0.001 meaning 0.14% of returns of Sun pharmaceutical Industries limited is explained by Nifty 50 balance 99.86% is error due to the variables not taken into the model. F is 0.064, the P value is 0.802, which is more than 0.05 so the overall model is not statistically significant.
Conclusion: Beta is -0.065 which is less than 1, so Sun pharmaceutical Industries limited is good for long term investment.
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