Author: Anant Mundra
Introduction:
Ajanta Pharma Limited, often abbreviated as APL, is a multinational pharmaceutical company based in India. The company specializes in the development, manufacturing, and marketing of quality finished dosages and is active in over 30 countries, focusing on various therapeutic segments.
Ajanta Pharma Ltd is a publicly traded company, and its stock performance can vary based on market conditions.
Data Collection:
Data was downloaded from NSE India site for the period 1 May 2023 to 30 April 2024.
Data was manipulated to find the Friday closing price.
Weekly Returns of Ajanta Pharma Limited and NIFTY 50 were calculated.
Weekly Return of Ajanta Pharma Limited Is Y and Weekly Return of NIFTY 50 is X.
Weekly Return of Ajanta Pharma Limited Was regressed on Weekly Return of NIFTY 50.
Data Analysis:
Weekly Return of Y = (-1.11) + (-0.26)
T stat = (-0.68)
N=49 R Square =0.01 F=0.47
P value= 0.049
Interpretation:
The above equation depicts the relationship between weekly returns of Ajanta Pharma Limited And weekly returns of NIFTY 50.
The + sign before the coefficient of NIFTY 50 tells that if NIFTY 50 rises Ajanta Pharma Limited. Will also rise and vice-versa. If NIFTY falls by 1 unit Ajanta Pharma Limited Will fall by .26
Figure in bracket (-0.68) is t stat for β (beta) and P value for which is 0.049 which is less than 0.05 meaning β (beta) is statistically significant at 5% level.
is 0.01 meaning 1% of company’s return are explained by NIFTY 50 the balance 99% maybe due to fundamentals.
F is 0.47 and P value is 0.049 meaning overall model is statistically significant.
Conclusion:
As β is -0.26 which is negative value indicates that investing in Ajanta Pharma Limited. Is not a good choice and you should avoid it.