Assessing the Influence of the Covid 19 Pandemic on Indian Pharmaceutical Companies

Abstract

Our objective is to study, analyze and draw inferences on the movement of the stock prices of Indian pharmaceutical companies solely based on the COVID-19 pandemic in India. We specifically targeted pharmaceutical stocks because their share price is more directly dependent on the COVID-19 pandemic than companies in other sectors. As the demand for the primary products sold by pharmaceutical companies, i.e., medicines, is directly dependent on the COVID-19 pandemic, a common hypothesis is that the stock prices of pharmaceutical companies at a given time are significantly contingent upon the COVID-19 pandemic situation. We have tested this hypothesis by calculating the correlation between pharmaceutical stock prices and COVID-19 variables that measure the severity and provide an outline of the COVID-19 pandemic. The COVID-19 variables we have considered provide information regarding covid cases, deaths, testing, vaccination, positivity rate, virus reproduction rate, and government restrictions to counter the spread of the virus. Furthermore, as human emotion plays a significant part in deciding the share prices, we have considered public fear and awareness by considering the frequency by which the terms “Covid 19” and “Covid medicines” are searched on Google. We have considered the stock prices of 19 companies that contribute to the Nifty Pharma index as the target values upon which the impact of the COVID-19 pandemic is tested. We have selected the covid fields that have the most significant impact on the pharmaceutical stock prices and then calculated the correlation between the Covid fields and the stock parameters. The data we have considered for our study belongs to the period from 15th March 2020 to 17th February 2022. Link to the Github repository with the code for the presented research: https://github.com/Atishaysjain/Predictive-Analysis-Project.