IPCALAB.NS
IPCA Laboratories Ltd
Price:  
1,415.80 
INR
Volume:  
921,489.00
India | Pharmaceuticals
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IPCALAB.NS WACC - Weighted Average Cost of Capital

The WACC of IPCA Laboratories Ltd (IPCALAB.NS) is 13.6%.

The Cost of Equity of IPCA Laboratories Ltd (IPCALAB.NS) is 13.90%.
The Cost of Debt of IPCA Laboratories Ltd (IPCALAB.NS) is 6.10%.

Range Selected
Cost of equity 12.90% - 14.90% 13.90%
Tax rate 19.40% - 25.70% 22.55%
Cost of debt 4.60% - 7.60% 6.10%
WACC 12.6% - 14.6% 13.6%
WACC

IPCALAB.NS WACC calculation

Category Low High
Long-term bond rate 6.9% 7.4%
Equity market risk premium 8.3% 9.3%
Adjusted beta 0.73 0.76
Additional risk adjustments 0.0% 0.5%
Cost of equity 12.90% 14.90%
Tax rate 19.40% 25.70%
Debt/Equity ratio 0.04 0.04
Cost of debt 4.60% 7.60%
After-tax WACC 12.6% 14.6%
Selected WACC 13.6%

IPCALAB.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 IPCALAB.NS:

cost_of_equity (13.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.73) + 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.