ELECTCAST.NS WACC - Weighted Average Cost of Capital

The WACC of Electrosteel Castings Ltd (ELECTCAST.NS) is 13.2%.

The Cost of Equity of Electrosteel Castings Ltd (ELECTCAST.NS) is 16.00%.

The Cost of Debt of Electrosteel Castings Ltd (ELECTCAST.NS) is 8.60%.

	Range	Selected
Cost of equity	13.90% - 18.10%	16.00%
Tax rate	21.50% - 22.60%	22.05%
Cost of debt	8.10% - 9.10%	8.60%
WACC	11.6% - 14.8%	13.2%

WACC

ELECTCAST.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	1.1

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.90%	18.10%

Tax rate	21.50%	22.60%
Debt/Equity ratio	0.43	0.43
Cost of debt	8.10%	9.10%

After-tax WACC	11.6%	14.8%


Selected WACC	13.2%

ELECTCAST.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 ELECTCAST.NS:

cost_of_equity (16.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.