Effect of resource allocation on pharmaceutical firm profitability in the Indian market

Shenbagavalli T.; Sathyanarayana N.; Rajest S.S.; Paramasivan P.; Huamán-Osorio A.; Huerta-Soto M. · International Journal of Electronic Finance (2025) · DOI: 10.1504/ijef.2026.154923

Resumen

This study aims to investigate the impact of capital structure factors on key financial performance indicators, including PAT, ROE, ROA, and EPS, as well as the risk profile of 19 pharmaceutical companies listed on NSE-India. The analysis seeks to elucidate how the combination of debt-equity ratios influences profitability and risk. Statistical analyses, specifically regression and panel regression tools, were conducted using SPSS 27 and STATA 17 over ten years (2012–2013 to 2021–2022). To categorise the companies based on size and risk, the 19 firms were divided into groups A, B, C, D, E, and F, respectively. The study found that random effects models were preferred, as indicated by the Hausman test. It was statistically significant for low-risk companies, while the results were insignificant for the remaining categories. Notably, the study revealed significant fixed effects for EPS in large companies based on size. These findings offer valuable insights for corporate managers when formulating capital structure strategies, particularly concerning firm size and risk management. Moreover, the study’s methodology can be applied to other sectors, contributing to broader socioeconomic development.

Instituciones: Universidad César Vallejo; Universidad Nacional Santiago Antúnez de Mayolo