Title : Relationship of Nifty50 with Piramal Pharma Limited
Author: Parth Pokale
Introduction:
Piramal Pharma Limited is a global pharmaceutical company based in India and part of the Piramal Group, known for its strong focus on quality, innovation, and patient care. The company works across the healthcare value chain, offering services in contract development and manufacturing, complex hospital generics, and consumer healthcare, and serves customers in over 100 countries, including major regulated markets like the US and Europe. With advanced manufacturing capabilities and a science-driven approach, Piramal Pharma aims to make safe, effective, and affordable medicines more accessible while building long-term value for patients, partners, and communities.
Objective:
Calculation of beta of Piramal Pharma Limited and observe its significance
Literature Review:
View 1: Dr. Navjyot Raval, 2Ms. Rhuta Mehta.(2020). A comparative study between nifty50 with financial services & pharmaceutical sector.
A stock market index represents the overall performance of the market or a specific sector by tracking selected stocks. The Nifty 50 is a well-diversified index of 50 companies covering key sectors of the Indian economy and is widely used as a benchmark for funds, index funds, and derivatives. This study examines the relationship between the Nifty 50 and the financial services and pharmaceutical sectors using ten years of data (2008–2018). The analysis, based on simple correlation and independent t-tests, shows a strong positive relationship between the Nifty 50 and both sectors.
View 2: Vevek S, Gopinath R, Dr. J. Sadeesh (2023). A study on growth, performance and relationship of nifty 50, auto index, pharma index, bank index and FMCG index.
The stock market allows investors to trade shares, bonds, and other securities, playing a vital role in economic growth. However, many investors face uncertainty about which Indian market indices to invest in and often lack clarity about how different sectors perform. This study analyzes key NSE indices—Nifty 50, Automobile, Pharma, FMCG, and Bank indices—using index returns from January 2018 to December 2022. The results highlight sharp fluctuations across sectors, showing strong gains and losses at different times, especially in the Automobile and Banking indices. Overall, the study highlights that markets are volatile and sectors are interconnected, emphasizing the need for investors to stay informed and track market trends before making investment decisions.
Data Collection:
The data of Nifty 50 and the data for Piramal Pharma Limited was downloaded from 30-11-2024 to 30-11-2025 form NSE India.com. This data is used for finding out the Friday closing prices for Nifty 50 and Piramal Pharma Limited. Weekly return was calculated by the formula (Yt+1-Yt)/Yt*100 and then weekly returns of the Nifty 50 was taken as X and the equity of Piramal Pharma Limited was taken as Y. Y was regressed on X.
Data Analysis:
Piramal Pharma Limited Returns = 20815.57 + 32.06 (NIFTY 50)
The above regression equation explains the relationship between the dependent variable (stock returns) and the independent variable (NIFTY 50 index values) using 49 weekly observations.
· The coefficient of X Variable 1 is positive (32.06), indicating a positive and moderate relationship between the NIFTY 50 index and stock returns. This implies that a one-unit increase in the NIFTY 50 index leads to an average increase of approximately 32.06 units in stock returns, showing that market movements have a noticeable influence on returns.
· The t-statistic for the coefficient is 5.00 with a p-value of 8.70E-06, which is well below the 1% and 5% levels of significance. This confirms that the coefficient is statistically significant, indicating that movements in the NIFTY 50 index have a meaningful impact on stock returns.
· The R-square value of 0.352 shows that approximately 35.2% of the variation in stock returns is explained by changes in the NIFTY 50 index, indicating a reasonable explanatory power of the regression model. The F-statistic of 25.03 with a highly significant Significance F value further confirms that the overall regression model is statistically significant and reliable.
Conclusion:
· The regression analysis indicates a moderate and statistically significant positive relationship between the stock returns and the market index (NIFTY 50). The estimated beta coefficient (β = 32.06) is positive and statistically significant (p-value = 8.70E-06), suggesting that the stock’s returns move in the same direction as the overall market.
· With an R² value of 0.352, a substantial portion of the variation in stock returns is explained by market movements, indicating meaningful market dependence. The significant F-statistic confirms the strength of the regression model. Overall, the stock behaves as a market-aligned security, with its performance being influenced by broader market trends along with firm-specific factors.
References:
· Dr. Navjyot Raval, 2Ms. Rhuta Mehta.(2020). A comparative study between nifty50 with financial services & pharmaceutical sector. International journal for innovative research in multidisciplinary field issn: 2455-0620 volume – 6, issue – 5, may – 2020 monthly, peer-reviewed, refereed, indexed journal with ic value: 86.87 impact factor: 6.497.
· Vevek S, Gopinath R, Dr. J. Sadeesh (2023). A study on growth, performance and relationship of nifty 50, auto index, pharma index, bank index and FMCG index. ISSN 2319-829X humanities and social science studies, vol. 12 issue (1) no 18 JANUARY – JUNE : 2023.