The WACC of Bhartiya International Ltd (BIL.NS) is 12.8%.
Range | Selected | |
Cost of equity | 14.5% - 17.8% | 16.15% |
Tax rate | 25.9% - 42.1% | 34% |
Cost of debt | 7.4% - 12.1% | 9.75% |
WACC | 11.5% - 14.2% | 12.8% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.92 | 1.07 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 14.5% | 17.8% |
Tax rate | 25.9% | 42.1% |
Debt/Equity ratio | 0.51 | 0.51 |
Cost of debt | 7.4% | 12.1% |
After-tax WACC | 11.5% | 14.2% |
Selected WACC | 12.8% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
BIL.NS | Bhartiya International Ltd | 0.51 | 0.63 | 0.48 |
526365.BO | Swarnsarita Gems Ltd | 1.33 | 1.07 | 0.58 |
541967.BO | Sky Gold Ltd | 0.38 | 0.93 | 0.75 |
AARVEEDEN.NS | Aarvee Denims and Exports Ltd | 0.78 | -0.22 | -0.15 |
INDTERRAIN.NS | Indian Terrain Fashions Ltd | 0.84 | 1.44 | 0.94 |
KANANIIND.NS | Kanani Industries Ltd | 0 | -0.01 | -0.01 |
KDDL.NS | KDDL Ltd | 0.07 | 1.14 | 1.09 |
KITEX.NS | Kitex Garments Ltd | 0.19 | 1.06 | 0.95 |
KKCL.NS | Kewal Kiran Clothing Ltd | 0.01 | 0.79 | 0.79 |
SPAL.NS | S. P. Apparels Ltd | 0.18 | 0.81 | 0.72 |
Low | High | |
Unlevered beta | 0.67 | 0.76 |
Relevered beta | 0.88 | 1.1 |
Adjusted relevered beta | 0.92 | 1.07 |
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 BIL.NS:
cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.