JTEKTINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of JTEKT India Ltd (JTEKTINDIA.NS) is 17.4%.

The Cost of Equity of JTEKT India Ltd (JTEKTINDIA.NS) is 17.85%.

The Cost of Debt of JTEKT India Ltd (JTEKTINDIA.NS) is 7.30%.

	Range	Selected
Cost of equity	16.00% - 19.70%	17.85%
Tax rate	26.70% - 26.90%	26.80%
Cost of debt	7.00% - 7.60%	7.30%
WACC	15.6% - 19.2%	17.4%

WACC

JTEKTINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.09	1.27

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	19.70%

Tax rate	26.70%	26.90%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.00%	7.60%

After-tax WACC	15.6%	19.2%


Selected WACC	17.4%

JTEKTINDIA.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 JTEKTINDIA.NS:

cost_of_equity (17.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.09) + 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.