AUROPHARMA.NS
Aurobindo Pharma Ltd
Price:  
1,121.00 
INR
Volume:  
1,627,657.00
India | Pharmaceuticals
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AUROPHARMA.NS WACC - Weighted Average Cost of Capital

The WACC of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 13.6%.

The Cost of Equity of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 14.50%.
The Cost of Debt of Aurobindo Pharma Ltd (AUROPHARMA.NS) is 6.10%.

Range Selected
Cost of equity 13.40% - 15.60% 14.50%
Tax rate 26.90% - 27.50% 27.20%
Cost of debt 4.70% - 7.50% 6.10%
WACC 12.5% - 14.6% 13.6%
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 0.79 0.83
Additional risk adjustments 0.0% 0.5%
Cost of equity 13.40% 15.60%
Tax rate 26.90% 27.50%
Debt/Equity ratio 0.1 0.1
Cost of debt 4.70% 7.50%
After-tax WACC 12.5% 14.6%
Selected WACC 13.6%

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 (14.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.79) + 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.