AARTIIND.NS WACC - Weighted Average Cost of Capital
The WACC of Aarti Industries Ltd (AARTIIND.NS) is 14.0%.
| Range | Selected | |
| Cost of equity | 14.3% - 16.9% | 15.6% |
| Tax rate | 9.6% - 11.9% | 10.75% |
| Cost of debt | 6.2% - 10.5% | 8.35% |
| WACC | 12.6% - 15.4% | 14.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.9 | 0.97 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 14.3% | 16.9% |
| Tax rate | 9.6% | 11.9% |
| Debt/Equity ratio | 0.24 | 0.24 |
| Cost of debt | 6.2% | 10.5% |
| After-tax WACC | 12.6% | 15.4% |
| Selected WACC | 14.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| AARTIIND.NS | Aarti Industries Ltd | 0.24 | 1.31 | 1.08 |
| AKZOINDIA.NS | Akzo Nobel India Ltd | 0 | 0.59 | 0.59 |
| ALKYLAMINE.NS | Alkyl Amines Chemicals Ltd | 0 | 0.98 | 0.98 |
| FLUOROCHEM.NS | Gujarat Fluorochemicals Ltd | 0.06 | 0.68 | 0.65 |
| GALAXYSURF.NS | Galaxy Surfactants Ltd | 0.02 | 0.79 | 0.78 |
| INDIGOPNTS.NS | Indigo Paints Ltd | 0 | 0.81 | 0.81 |
| NAVINFLUOR.NS | Navin Fluorine International Ltd | 0.05 | 0.68 | 0.65 |
| OAL.NS | Oriental Aromatics Ltd | 0.28 | 0.91 | 0.73 |
| SUPPETRO.NS | Supreme Petrochem Ltd | 0 | 0.64 | 0.64 |
| VINATIORGA.NS | Vinati Organics Ltd | 0 | 1.04 | 1.04 |
| Low | High | |
| Unlevered beta | 0.7 | 0.79 |
| Relevered beta | 0.85 | 0.96 |
| Adjusted relevered beta | 0.9 | 0.97 |
AARTIIND.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 AARTIIND.NS:
cost_of_equity (15.60%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.9) + 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.