Topic: Relationship of Nifty 50 with Apollo Hospital Enterprise Limited
Author: Aashi Singh
Introduction:
Apollo Hospitals Enterprise Limited (AHEL) is an Indian multinational healthcare group headquartered in Chennai. It was founded in 1983 by Dr. Prathap C. Reddy as the first corporate healthcare provider in India. The company has since evolved into Asia’s foremost integrated healthcare services provider.
- Business Model: Apollo operates a robust healthcare ecosystem that includes:
- Hospitals: A network of 70+ owned and managed hospitals with over 10,000 beds.
- Pharmacies: Over 5,000 retail outlets, making it the largest pharmacy chain in India.
- Diagnostics & Clinics: Primary care clinics (Apollo Clinics), diagnostic centers, and specialized centers for diabetes, dentistry, and cradle care.
- Digital Health: Apollo 24|7, an omni-channel digital platform offering tele-consultations and medicine delivery.
- Significance: As a constituent of the NIFTY 50 index, Apollo Hospitals is considered a blue-chip stock in the Indian healthcare sector, known for its pioneering role in medical tourism and clinical excellence.
Objective:
The primary objective of this study is to analyses the systematic risk of Apollo Hospital Enterprise Ltd. relative to the broader market (Nifty 50 Index). Specifically, the study aims to:
- Calculate the Beta (β) coefficient of Apollo Hospital Enterprise.
- Determine the stock’s volatility compared to the market benchmark.
- Assess whether the stock acts as an aggressive or defensive investment during the analysed period.
Literature Review:
Apollo Hospitals stock has shown slight declines over the past year whereas broader market indices like the Sensex have gained in the comparable period.
This highlights short-term underperformance relative to broader benchmarks, possibly due to sector specifics or near-term earnings reactions
Data Collection:
The data for this analysis was sourced from the provided financial dataset covering the period from December 1, 2024, to November 30, 2025.
- Stock: Apollo Hospital Enterprise Ltd. (Closing Prices).
- Market Index: Nifty 50 (Closing Prices).
- Frequency: Weekly closing prices were used to calculate weekly returns.
- Observation Count: 48 weekly data points.
- Variables:
- Independent Variable (X): Weekly Returns of NIFTY 50 Index.
- Dependent Variable (Y): Weekly Returns of APOLLOHOSP.
Data Analysis:
· Regression Equation:
Apollo Hospital (Y) = 0.1292 + 1.0219 * Nifty 50 (X)
· Other variables:
o T-Stats: 5.2599
o No. of observations (n): 48
o R^2: 0.3756
o F-Stats: 27.6661
o P-Value: 3.6574
· Interpretation:
o The regression equation above describes the relationship between the Weekly Return of Nifty 50 (X) and the share price of Apollo Hospital Enterprise Limited (Y). A positive coefficient of X indicates a direct relationship. If the weekly price of Nifty 50 rises by 1%, the weekly price of Apollo Hospital Enterprise will rise by 1.02% and vice versa.
o The t-stat for Beta (coefficient of Weekly Return of Nifty (X)) is 5.2599, and the p-value is 3.6574, which is more than 0.05, indicating that Beta (β) is not statistically significant at the 5% level.
o The number of observations is 48, and R^2 is 0.3756, meaning that 37.56% of the variation in the Weekly Return of Apollo Hospital Enterprise (Y) is explained by the Weekly Return of Nifty (X), while the remaining 62.44% is attributed to other factors not included in the model, such as equity fundamentals.
o This is a good sign, as the Nifty index influence is less, and the company fundamentals are strong. The F-stat is 27.6661, and the p-value is 3.6574, indicating that the overall model is statistically significant at the 5% level.
Conclusion:
Since Beta (β) = 1.0219, which is more than 1, the stock is an aggressive one, and one must invest in this company for the short term if Nifty is expected to rise.
References:
· Sharpe, W. F. (1964).
Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk.
The Journal of Finance, 19(3), 425–442.
(Foundational paper explaining Beta and systematic risk under CAPM)
· Bodie, Z., Kane, A., & Marcus, A. J. (2021).
Investments (11th ed.). McGraw-Hill Education.
(Explains aggressive vs defensive stocks based on Beta values)
· Ross, S. A., Wester field, R., & Jaffe, J. (2019).
Corporate Finance (12th ed.). McGraw-Hill Education