TITLE: RELATIONSHIP OF NIFTY WITH PIRAMAL PHARMA LIMITED.
AUTHOR: Prachi Kadam
INTRODUCTION:
Piramal Pharma Limited is a renowned global pharmaceutical company headquartered in Mumbai, India. With a legacy spanning decades, Piramal Pharma is known for its innovation and commitment to healthcare excellence. It operates across the pharmaceutical value chain, from drug discovery to manufacturing and marketing, offering a diverse portfolio of therapeutic solutions. With a strong global presence and a focus on sustainability, Piramal Pharma continues to be a trusted leader in the pharmaceutical industry, dedicated to improving healthcare outcomes worldwide.
OBJECTIVES:
To find out BETA (β) of Piramal Pharma Limited and its significance.
DATA COLLECTION:
The data for NIFTY 50 and Piramal Pharma Limited has been taken from NSEindia.com for the period of 1-2-23 to 31-1-24. The data was manipulated to bring the results of Friday. Weekly closing prices were found out. Weekly returns of nifty and company were calculated. Weekly returns of Piramal Pharma Limited were regressed on weekly returns of nifty50.
DATA ANALYSIS:
Equation of regression of weekly returns of Piramal Pharma Limited on weekly returns of Nifty 50 Index-
Weekly returns of Piramal Pharma Limited be Y and weekly returns of Nifty 50 be X
Format of Regression equation is Y = α + β(X)
Y = 0.3141+1.4545*(X)
Where,
Number of Observations = 48,
R Square = 0.122670277,
F = 6.431826695,
P-value = 0.014669224,
(T-stat = 2.53610463)
Interpretation-
- The above equation shows relationship between weekly returns of Piramal Pharma Limited Company and weekly returns of Nifty 50 Index.
- Positive sign means direct relation, meaning if weekly returns of Nifty 50 Index rise then weekly returns of Piramal Pharma Limited Company also rises and vice-versa.
- If weekly returns of Nifty 50 Index rise by 1-unit, weekly returns of Piramal Pharma Limited Company will rise by 4545 unit and vice-versa.
- Figure in bracket shows t-stat for β, P-value for which is 0.014669224, which is less than 0.05 meaning β is statistically significant at 5% significance level.
- Number of Observations are 48, R-square value is 122670277 meaning approximately 0.9% of weekly returns of Piramal Pharma Limited Company are explained by weekly returns of Nifty 50 Index. Balance 88% (approximate) is error due to other variables which are not in the model.
- F is 431826695, the P-value of which is 0.014669224, which is less than 0.05 meaning overall, the model is statistically significant at 5% significance level.
CONCLUSION:
As β (1.4545) is greater than 1, it is good to invest in Piramal Pharma Limited Company for short term.