HCL-INSYS.NS WACC - Weighted Average Cost of Capital

The WACC of HCL Infosystems Ltd (HCL-INSYS.NS) is 9.4%.

The Cost of Equity of HCL Infosystems Ltd (HCL-INSYS.NS) is 12.70%.

The Cost of Debt of HCL Infosystems Ltd (HCL-INSYS.NS) is 5.50%.

	Range	Selected
Cost of equity	10.90% - 14.50%	12.70%
Tax rate	0.80% - 2.50%	1.65%
Cost of debt	4.00% - 7.00%	5.50%
WACC	7.8% - 11.0%	9.4%

WACC

HCL-INSYS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.48	0.71

Additional risk adjustments	0.0%	0.5%
Cost of equity	10.90%	14.50%

Tax rate	0.80%	2.50%
Debt/Equity ratio	0.82	0.82
Cost of debt	4.00%	7.00%

After-tax WACC	7.8%	11.0%


Selected WACC	9.4%

HCL-INSYS.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 HCL-INSYS.NS:

cost_of_equity (12.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.48) + 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.