Title–Relationship of Dr.Reddy’s laboratories Ltd.
Author-Dhani Awasthi
Introduction:
Dr. Reddy’s Laboratories Ltd. (DRL) is a global pharmaceutical company dedicated to delivering affordable and innovative medicines for better health. With expertise in Pharmaceutical Services & Active Ingredients, Global Generics, and Proprietary Products, DRL offers a wide range of products and services, such as Active Pharmaceutical Ingredients (APIs), custom pharmaceutical solutions, generics, biosimilars, and specialized formulations.
Objective:
To find out Beta of Dr.Reddy and its significance.
Data Collection:
Data for Nifty 50 and Dr.Reddy was downloaded from NSE site for current year i.e.1-4-23 to 31-3-23.Data was manipulated to get Friday by closing prices and weekly returns calculated by formula (Yt-1 – Yt)/Yt*100
Weekly returns of Dr.Reddy was regressed on weekly return of Nifty 50.
Data analysis:
Weekly return of Dr.reddy=0.35+0.44
0.73(T-stat weekly return of nifty 50)
N=46,R-square=0.03,F=1.64,P-Value=0.21
The above equation shows the relationship between nifty 50 and Dr.reddy ltd.The positive sign means if nifty 50 rises Dr.reddy will also rise and vice versa.The coefficient of Nifty 50 has T-Stat=1.28 and P-Value=0.20,it is more than 0.5 this means Nifty 50 is not statistically significant to increase prices of Dr.reddy ltd.
R-square=0.03,meaning .01% of Dr.reddy Ltd is explained by Nifty 50.99.9% is depends upon other factors like fundamentals are other factors.
F=1.64 and P-value=0.20 ,meaning it is more than .05 meaning overall model is not statistically significant.
Conclusion:
Weekly coefficient =0.44 less than 1 but positive,it means it is good for long term investment.
If it is more than 1 but positive,then it is good for short term investment if Nifty 50 is at low.
If it is negative,then avoid this for investment.