AARTIDRUGS.NS WACC - Weighted Average Cost of Capital
The WACC of Aarti Drugs Ltd (AARTIDRUGS.NS) is 15.4%.
| Range | Selected | |
| Cost of equity | 15.5% - 18.1% | 16.8% |
| Tax rate | 24.0% - 24.8% | 24.4% |
| Cost of debt | 7.1% - 7.9% | 7.5% |
| WACC | 14.2% - 16.6% | 15.4% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.04 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.5% | 18.1% |
| Tax rate | 24.0% | 24.8% |
| Debt/Equity ratio | 0.14 | 0.14 |
| Cost of debt | 7.1% | 7.9% |
| After-tax WACC | 14.2% | 16.6% |
| Selected WACC | 15.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AARTIDRUGS.NS | Aarti Drugs Ltd | 0.14 | 1.05 | 0.95 |
| ASTRAZEN.NS | Astrazeneca Pharma India Ltd | 0 | 0.87 | 0.87 |
| ERIS.NS | Eris Lifesciences Ltd | 0.14 | 0.8 | 0.73 |
| FDC.NS | F D C Ltd | 0 | 0.96 | 0.95 |
| GRANULES.NS | Granules India Ltd | 0.1 | 1.33 | 1.23 |
| IOLCP.NS | IOL Chemicals and Pharmaceuticals Ltd | 0.01 | 1.73 | 1.72 |
| JBCHEPHARM.NS | J B Chemicals and Pharmaceuticals Ltd | 0.01 | 0.61 | 0.6 |
| SEQUENT.NS | SeQuent Scientific Ltd | 0.11 | 1.68 | 1.55 |
| SOLARA.NS | Solara Active Pharma Sciences Ltd | 0.35 | 1.25 | 0.99 |
| STAR.NS | Strides Pharma Science Ltd | 0.37 | 1.42 | 1.11 |
| Low | High | |
| Unlevered beta | 0.95 | 1.03 |
| Relevered beta | 1.06 | 1.15 |
| Adjusted relevered beta | 1.04 | 1.1 |
AARTIDRUGS.NS's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for AARTIDRUGS.NS:
cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.04) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.