KECL.NS WACC - Weighted Average Cost of Capital

The WACC of Kirloskar Electric Company Ltd (KECL.NS) is 18.6%.

The Cost of Equity of Kirloskar Electric Company Ltd (KECL.NS) is 18.85%.

The Cost of Debt of Kirloskar Electric Company Ltd (KECL.NS) is 23.80%.

	Range	Selected
Cost of equity	17.10% - 20.60%	18.85%
Tax rate	30.00% - 30.00%	30.00%
Cost of debt	23.70% - 23.90%	23.80%
WACC	17.0% - 20.1%	18.6%

WACC

KECL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.23	1.37

Additional risk adjustments	0.0%	0.5%
Cost of equity	17.10%	20.60%

Tax rate	30.00%	30.00%
Debt/Equity ratio	0.13	0.13
Cost of debt	23.70%	23.90%

After-tax WACC	17.0%	20.1%


Selected WACC	18.6%

KECL.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 KECL.NS:

cost_of_equity (18.85%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.23) + 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.