HIKAL.NS WACC - Weighted Average Cost of Capital

The WACC of Hikal Ltd (HIKAL.NS) is 14.0%.

The Cost of Equity of Hikal Ltd (HIKAL.NS) is 15.80%.

The Cost of Debt of Hikal Ltd (HIKAL.NS) is 9.80%.

	Range	Selected
Cost of equity	14.00% - 17.60%	15.80%
Tax rate	26.60% - 26.80%	26.70%
Cost of debt	9.10% - 10.50%	9.80%
WACC	12.5% - 15.5%	14.0%

WACC

HIKAL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.85	1.04

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.00%	17.60%

Tax rate	26.60%	26.80%
Debt/Equity ratio	0.26	0.26
Cost of debt	9.10%	10.50%

After-tax WACC	12.5%	15.5%


Selected WACC	14.0%

HIKAL.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 HIKAL.NS:

cost_of_equity (15.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.85) + 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.