AUROPHARMA.NS WACC - Weighted Average Cost of Capital

The WACC of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 14.0%.

The Cost of Equity of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 14.95%.

The Cost of Debt of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 5.75%.

	Range	Selected
Cost of equity	13.90% - 16.00%	14.95%
Tax rate	25.30% - 26.70%	26.00%
Cost of debt	4.00% - 7.50%	5.75%
WACC	12.9% - 15.1%	14.0%

WACC

AUROPHARMA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.84	0.87

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	16.00%

Tax rate	25.30%	26.70%
Debt/Equity ratio	0.09	0.09
Cost of debt	4.00%	7.50%

After-tax WACC	12.9%	15.1%


Selected WACC	14.0%

AUROPHARMA.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 AUROPHARMA.NS:

cost_of_equity (14.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.84) + 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.