Author: Anish Nagarale ,31
Introduction:
Abbott India Limited is a leading, debt-free multinational pharmaceutical company established in 1944, operating as a subsidiary of Abbott Laboratories, USA. Headquartered in Mumbai, it specializes in branded generic medicines across key areas like gastroenterology, women’s health, and metabolic disorders, holding top market positions with brands like Thyronorm and Digene
Objective:
To calculate the Beta (β) of Abbott India Limited and observe its significance.
Literature Review:
Sharpe (1964): In the Capital Asset Pricing Model (CAPM), Beta serves as a measure of a security’s volatility relative to the market as a whole.
Fama & French (1992): Their research indicates that while Beta is a key risk factor, other variables also influence stock returns.
Data Collection:
Weekly data collected from NSE. X = Nifty 50 Returns and Y = Abbott India Limited Returns. Y is regressed on X.
Data Analysis:
Regression Equation:
Y = 0.2914-0.2403X
|
Statistic |
Value |
|
Observations |
48 |
|
R Square |
0.0685 |
|
F Value |
3.3094 |
|
P-value |
0.0755 |
|
Beta |
0.5020 |
|
Intercept |
0.2914 |
Interpretation:
Beta is positive and less than 1, showing weak relationship with Nifty 50 . If Nifty increases by 1 unit, Abbott India Limited increases by 0.5 units. R square shows 6.85% variation explained. P-value <0.07 shows less significance. R Square is very small suggest that almost 94% of things are not explained by market
Conclusion:
Since Beta <0.5, Abbott India Limited is a stable stock . Suitable for long term investment when market is rising.
References:
Sharpe, W. F. (1964). Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk. Journal of Finance.
Fama, E. F., & French, K. R. (1992). The Cross-Section of Expected Stock Returns. Journal of Finance.
National Stock Exchange of India (NSE India). (2025). Historical data retrieved from official website.