The WACC of Dalmia Bharat Sugar and Industries Ltd (DALMIASUG.NS) is 12.5%.
Range | Selected | |
Cost of equity | 13.7% - 16.4% | 15.05% |
Tax rate | 24.1% - 25.6% | 24.85% |
Cost of debt | 4.3% - 7.8% | 6.05% |
WACC | 11.2% - 13.9% | 12.5% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.82 | 0.91 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 13.7% | 16.4% |
Tax rate | 24.1% | 25.6% |
Debt/Equity ratio | 0.31 | 0.31 |
Cost of debt | 4.3% | 7.8% |
After-tax WACC | 11.2% | 13.9% |
Selected WACC | 12.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
DALMIASUG.NS | Dalmia Bharat Sugar and Industries Ltd | 0.31 | 1.94 | 1.58 |
519421.BO | KSE Ltd | 0.03 | 0.56 | 0.54 |
531069.BO | Vijay Solvex Ltd | 0.12 | 0.12 | 0.11 |
BANARISUG.NS | Bannari Amman Sugars Ltd | 0.03 | 0.62 | 0.61 |
DIAMONDYD.NS | Prataap Snacks Ltd | 0.03 | 0.52 | 0.51 |
DWARKESH.NS | Dwarikesh Sugar Industries Ltd | 0.55 | 1.81 | 1.28 |
GOKUL.NS | Gokul Refoils and Solvent Ltd | 0.63 | 1.05 | 0.71 |
MAWANASUG.NS | Mawana Sugars Ltd | 1.04 | 1.43 | 0.81 |
PARAGMILK.NS | Parag Milk Foods Ltd | 0.24 | 0.83 | 0.7 |
RANASUG.NS | Rana Sugars Ltd | 1.63 | 1.26 | 0.57 |
Low | High | |
Unlevered beta | 0.59 | 0.71 |
Relevered beta | 0.73 | 0.87 |
Adjusted relevered beta | 0.82 | 0.91 |
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 DALMIASUG.NS:
cost_of_equity (15.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.82) + 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.