INDOTECH.NS
Indo Tech Transformers Ltd
Price:  
2,021.60 
INR
Volume:  
64,371.00
India | Electrical Equipment
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INDOTECH.NS WACC - Weighted Average Cost of Capital

The WACC of Indo Tech Transformers Ltd (INDOTECH.NS) is 16.1%.

The Cost of Equity of Indo Tech Transformers Ltd (INDOTECH.NS) is 16.10%.
The Cost of Debt of Indo Tech Transformers Ltd (INDOTECH.NS) is 7.50%.

Range Selected
Cost of equity 14.80% - 17.40% 16.10%
Tax rate 1.80% - 8.70% 5.25%
Cost of debt 7.50% - 7.50% 7.50%
WACC 14.8% - 17.4% 16.1%
WACC

INDOTECH.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.96 1.03
Additional risk adjustments 0.0% 0.5%
Cost of equity 14.80% 17.40%
Tax rate 1.80% 8.70%
Debt/Equity ratio 0 0
Cost of debt 7.50% 7.50%
After-tax WACC 14.8% 17.4%
Selected WACC 16.1%

INDOTECH.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 INDOTECH.NS:

cost_of_equity (16.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.96) + 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.