HIL.NS WACC - Weighted Average Cost of Capital

The WACC of HIL Ltd (HIL.NS) is 12.0%.

The Cost of Equity of HIL Ltd (HIL.NS) is 16.15%.

The Cost of Debt of HIL Ltd (HIL.NS) is 5.95%.

	Range	Selected
Cost of equity	14.50% - 17.80%	16.15%
Tax rate	19.90% - 23.80%	21.85%
Cost of debt	4.90% - 7.00%	5.95%
WACC	10.7% - 13.3%	12.0%

WACC

HIL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.92	1.07

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.50%	17.80%

Tax rate	19.90%	23.80%
Debt/Equity ratio	0.56	0.56
Cost of debt	4.90%	7.00%

After-tax WACC	10.7%	13.3%


Selected WACC	12.0%

HIL.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 HIL.NS:

cost_of_equity (16.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.92) + 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.