GRANULES.NS WACC - Weighted Average Cost of Capital

The WACC of Granules India Ltd (GRANULES.NS) is 14.7%.

The Cost of Equity of Granules India Ltd (GRANULES.NS) is 15.90%.

The Cost of Debt of Granules India Ltd (GRANULES.NS) is 6.40%.

	Range	Selected
Cost of equity	13.50% - 18.30%	15.90%
Tax rate	25.50% - 26.00%	25.75%
Cost of debt	4.90% - 7.90%	6.40%
WACC	12.5% - 16.9%	14.7%

WACC

GRANULES.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.8	1.12

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	18.30%

Tax rate	25.50%	26.00%
Debt/Equity ratio	0.12	0.12
Cost of debt	4.90%	7.90%

After-tax WACC	12.5%	16.9%


Selected WACC	14.7%

GRANULES.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 GRANULES.NS:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.