KECL.NS
Kirloskar Electric Company Ltd
Price:  
130.50 
INR
Volume:  
73,264.00
India | Electrical Equipment
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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.