The WACC of Cyient Ltd (CYIENT.NS) is 17.7%.
Range | Selected | |
Cost of equity | 16.4% - 20.3% | 18.35% |
Tax rate | 24.2% - 24.8% | 24.5% |
Cost of debt | 7.6% - 10.3% | 8.95% |
WACC | 15.9% - 19.6% | 17.7% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 1.15 | 1.33 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 16.4% | 20.3% |
Tax rate | 24.2% | 24.8% |
Debt/Equity ratio | 0.06 | 0.06 |
Cost of debt | 7.6% | 10.3% |
After-tax WACC | 15.9% | 19.6% |
Selected WACC | 17.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
CYIENT.NS | Cyient Ltd | 0.06 | 1.56 | 1.5 |
300166.SZ | Business-intelligence of Oriental Nations Corp Ltd | 0.09 | 1.64 | 1.53 |
300297.SZ | Bluedon Information Security Technologies Co Ltd | 13.11 | 0.4 | 0.04 |
300523.SZ | Beijing Global Safety Technology Co Ltd | 0.18 | 1.44 | 1.27 |
3817.T | SRA Holdings Inc | 0 | 0.58 | 0.58 |
600756.SS | Inspur Software Co Ltd | 0 | 1.86 | 1.86 |
9692.T | Computer Engineering & Consulting Ltd | 0 | 1.01 | 1.01 |
BSOFT.NS | Birlasoft Ltd | 0.01 | 1.4 | 1.39 |
KPITTECH.NS | KPIT Technologies Ltd | 0.01 | 1.68 | 1.67 |
ZENSARTECH.NS | Zensar Technologies Ltd | 0.01 | 1.05 | 1.04 |
Low | High | |
Unlevered beta | 1.18 | 1.43 |
Relevered beta | 1.22 | 1.49 |
Adjusted relevered beta | 1.15 | 1.33 |
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 CYIENT.NS:
cost_of_equity (18.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.15) + 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.