HAVELLS.NS WACC - Weighted Average Cost of Capital

The WACC of Havells India Ltd (HAVELLS.NS) is 15.9%.

The Cost of Equity of Havells India Ltd (HAVELLS.NS) is 15.90%.

The Cost of Debt of Havells India Ltd (HAVELLS.NS) is 10.00%.

	Range	Selected
Cost of equity	14.30% - 17.50%	15.90%
Tax rate	25.80% - 26.00%	25.90%
Cost of debt	7.50% - 12.50%	10.00%
WACC	14.3% - 17.5%	15.9%

WACC

HAVELLS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.50%

Tax rate	25.80%	26.00%
Debt/Equity ratio	0	0
Cost of debt	7.50%	12.50%

After-tax WACC	14.3%	17.5%


Selected WACC	15.9%

HAVELLS.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 HAVELLS.NS:

cost_of_equity (15.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.