ESTER.NS WACC - Weighted Average Cost of Capital
The WACC of Ester Industries Ltd (ESTER.NS) is 13.9%.
| Range | Selected | |
| Cost of equity | 15.8% - 20.0% | 17.9% |
| Tax rate | 26.5% - 36.7% | 31.6% |
| Cost of debt | 10.3% - 12.1% | 11.2% |
| WACC | 12.6% - 15.2% | 13.9% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1.08 | 1.31 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.8% | 20.0% |
| Tax rate | 26.5% | 36.7% |
| Debt/Equity ratio | 0.63 | 0.63 |
| Cost of debt | 10.3% | 12.1% |
| After-tax WACC | 12.6% | 15.2% |
| Selected WACC | 13.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ESTER.NS | Ester Industries Ltd | 0.63 | 1.74 | 1.19 |
| 500655.BO | Garware Polyester Ltd | 0.07 | 1.14 | 1.08 |
| IGPL.NS | I G Petrochemicals Ltd | 0.18 | 1.18 | 1.04 |
| KANORICHEM.NS | Kanoria Chemicals and Industries Ltd | 1.24 | 1.6 | 0.84 |
| MAYURUNIQ.NS | Mayur Uniquoters Ltd | 0 | 0.65 | 0.65 |
| OCCL.NS | Oriental Carbon & Chemicals Ltd | 0.6 | 0.72 | 0.5 |
| PANAMAPET.NS | Panama Petrochem Ltd | 0.02 | 1.12 | 1.1 |
| SPTL.NS | Sintex Plastics Technology Ltd | 37.04 | 0.87 | 0.03 |
| TIRUMALCHM.NS | Thirumalai Chemicals Ltd | 0.43 | 1.28 | 0.97 |
| VISHNU.NS | Vishnu Chemicals Ltd | 0.1 | 0.65 | 0.61 |
| Low | High | |
| Unlevered beta | 0.77 | 1 |
| Relevered beta | 1.12 | 1.46 |
| Adjusted relevered beta | 1.08 | 1.31 |
ESTER.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 ESTER.NS:
cost_of_equity (17.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.08) + 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.