Title: Relationship of Procter & Gamble Health Limited (PGHL) with Nifty 50
Author: Priyanshi Dangi
Introduction
Procter & Gamble Health Limited (PGHL) is a pharmaceutical company engaged in the manufacture and marketing of healthcare and wellness products in India. The company offers vitamins, nutrition supplements and other prescription medicines under well-known brands such as Evion, Neurobion, Seven Seas, Nasivion, Polybion and Livogen. It operates primarily in the Indian pharmaceutical sector and focuses on consumer health and therapeutic segments. PGHL traces its origins to 1967 and is headquartered in Mumbai, India
Objective
The objective of this study is to calculate the beta of PGHL with respect to Nifty 50 and to observe the significance of this relationship, in order to understand the systematic risk of PGHL relative to the overall market.
Literature review
- Abesco (2017) explains that within the Capital Asset Pricing Model (CAPM), beta measures the sensitivity of a security’s return to movements in the market portfolio, and a higher beta implies greater systematic risk and higher expected return in efficient markets (Abesco, as cited in Expert Journals, 2017).
- Abesco further notes that the beta–return relationship can be conditional on market phases; in up markets, high beta stocks tend to earn higher returns than low beta stocks, while in down markets high beta stocks can underperform, reflecting the trade-off between risk and return (Abesco, as cited in Expert Journals, 2017).
Data collection
- Data for PGHL and Nifty 50 were taken from the National Stock Exchange (NSE) of India website (nseindia.com) for the period 1 December 2024 to 30 November 2025.
- Friday closing prices for PGHL and Nifty 50 were extracted for each week in this period and weekly returns were calculated for both series.
- Weekly returns of Nifty 50 were taken as X (independent variable) and weekly returns of PGHL were taken as Y (dependent variable).
- A simple linear regression of Y on X was estimated:
Y=α+βX+ε
, where β
represents the beta of PGHL with respect to Nifty 50.
Data analysis and interpretation
From the regression output in your file:
· Regression equation (beta model):
ReturnPGHL=0.0059-0.4708×ReturnNifty
· Observations (N): 48 weekly observations
· R²: 0.0063, meaning only about 0.63% of the variation in PGHL’s weekly returns is explained by Nifty 50 weekly returns.
· F-statistic: 0.2903 with Significance F (p-value) = 0.5926, indicating that the overall regression model is not statistically significant at conventional levels (1%, 5% or 10%).
· Intercept (alpha): 0.0059, p-value = 0.9893, not statistically significant.
· Slope (beta): -0.4708, standard error = 0.8738, t-stat = -0.5388, p-value = 0.5926, showing that beta is statistically insignificant.
Interpretation in simple language (similar to your demand–price example):
· The estimated equation ReturnPGHL=0.0059-0.4708×ReturnNifty
shows the relationship between PGHL returns and Nifty 50 returns.
· The negative sign of beta (-0.4708) suggests an inverse relationship: if Nifty 50 return rises by 1 unit, PGHL return is expected to fall by about 0.4708 units, and vice versa; however, this effect is not statistically reliable.
· The t-statistic for beta is -0.5388 with a p-value of 0.5926, which is far greater than 0.10, so beta is not statistically significant even at the 10% level.
· The R² of 0.0063 implies that only around 0.63% of the variability in PGHL’s returns is explained by Nifty 50, and the remaining 99.37% is due to other firm-specific or sector-specific factors not included in the model.
· The F-statistic of 0.2903 with p-value 0.5926 indicates that the model as a whole does not provide a statistically significant explanation of PGHL’s returns.
Conclusion
In this study, the estimated beta of PGHL with respect to Nifty 50 is negative and statistically insignificant, indicating that there is no reliable linear relationship between PGHL’s weekly returns and Nifty 50 weekly returns over the period considered. Given the low absolute value of beta (around -0.47) and the very low R², the stock does not move systematically with the market index, so it behaves more like a low‑beta/uncorrelated stock rather than a typical market‑sensitive stock. On this basis, the result is closer to the “beta less than 1” situation, so PGHL may be considered more appropriate for long‑term investment where market movements in Nifty 50 are not the dominant driver of its return, and short‑term trading purely based on Nifty trends is not recommended.
References
- Abesco. (2017). Conditional relationship between beta and return in the US stock market. Expert Journal of Finance, X(Y), pp–pp.business.expertjournals
- National Stock Exchange of India. (n.d.). Procter & Gamble Health Limited (PGHL) and Nifty 50 historical prices. Retrieved from https://www.nseindia.comniftyindices+1