The WACC of Electrosteel Castings Ltd (ELECTCAST.NS) is 15.0%.
Range | Selected | |
Cost of equity | 15.7% - 19.4% | 17.55% |
Tax rate | 21.5% - 22.6% | 22.05% |
Cost of debt | 8.1% - 9.2% | 8.65% |
WACC | 13.5% - 16.5% | 15.0% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 1.07 | 1.24 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 15.7% | 19.4% |
Tax rate | 21.5% | 22.6% |
Debt/Equity ratio | 0.31 | 0.31 |
Cost of debt | 8.1% | 9.2% |
After-tax WACC | 13.5% | 16.5% |
Selected WACC | 15.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
ELECTCAST.NS | Electrosteel Castings Ltd | 0.31 | 2.23 | 1.8 |
APOLLOPIPE.NS | Apollo Pipes Ltd | 0.05 | 0.47 | 0.45 |
ASIANTILES.NS | Asian Granito India Ltd | 0.26 | 1.82 | 1.51 |
CERA.NS | Cera Sanitaryware Ltd | 0.01 | 1.03 | 1.03 |
EVERESTIND.NS | Everest Industries Ltd | 0.11 | 0.99 | 0.91 |
GREENLAM.NS | Greenlam Industries Ltd | 0.18 | 1.35 | 1.19 |
HSIL.NS | HSIL Ltd | 0.6 | 1.25 | 0.85 |
NITCO.NS | Nitco Ltd | 0.09 | 1.4 | 1.31 |
ORIENTBELL.NS | Orient Bell Ltd | 0.11 | 0.32 | 0.29 |
PPL.NS | Prakash Pipes Ltd | 0.04 | 1.5 | 1.45 |
SOMANYCERA.NS | Somany Ceramics Ltd | 0.16 | 0.55 | 0.49 |
Low | High | |
Unlevered beta | 0.91 | 1.19 |
Relevered beta | 1.1 | 1.36 |
Adjusted relevered beta | 1.07 | 1.24 |
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 (17.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.