AJANTPHARM.NS
Ajanta Pharma Ltd
Price:  
2,520.70 
INR
Volume:  
318,634.00
India | Pharmaceuticals
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AJANTPHARM.NS WACC - Weighted Average Cost of Capital

The WACC of Ajanta Pharma Ltd (AJANTPHARM.NS) is 13.8%.

The Cost of Equity of Ajanta Pharma Ltd (AJANTPHARM.NS) is 13.80%.
The Cost of Debt of Ajanta Pharma Ltd (AJANTPHARM.NS) is 15.20%.

Range Selected
Cost of equity 12.60% - 15.00% 13.80%
Tax rate 22.20% - 24.30% 23.25%
Cost of debt 7.50% - 22.90% 15.20%
WACC 12.6% - 15.0% 13.8%
WACC

AJANTPHARM.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.69 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.60% 15.00%
Tax rate 22.20% 24.30%
Debt/Equity ratio 0 0
Cost of debt 7.50% 22.90%
After-tax WACC 12.6% 15.0%
Selected WACC 13.8%

AJANTPHARM.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 AJANTPHARM.NS:

cost_of_equity (13.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.