HINDALCO.NS
Hindalco Industries Ltd
Price:  
632.10 
INR
Volume:  
6,341,829.00
India | Metals & Mining
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HINDALCO.NS WACC - Weighted Average Cost of Capital

The WACC of Hindalco Industries Ltd (HINDALCO.NS) is 13.4%.

The Cost of Equity of Hindalco Industries Ltd (HINDALCO.NS) is 17.20%.
The Cost of Debt of Hindalco Industries Ltd (HINDALCO.NS) is 6.70%.

Range Selected
Cost of equity 15.30% - 19.10% 17.20%
Tax rate 27.50% - 30.30% 28.90%
Cost of debt 5.50% - 7.90% 6.70%
WACC 11.9% - 15.0% 13.4%
WACC

HINDALCO.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 1.01 1.2
Additional risk adjustments 0.0% 0.5%
Cost of equity 15.30% 19.10%
Tax rate 27.50% 30.30%
Debt/Equity ratio 0.43 0.43
Cost of debt 5.50% 7.90%
After-tax WACC 11.9% 15.0%
Selected WACC 13.4%

HINDALCO.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 HINDALCO.NS:

cost_of_equity (17.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.01) + 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.