KECL.NS WACC - Weighted Average Cost of Capital

The WACC of Kirloskar Electric Company Ltd (KECL.NS) is 16.7%.

The Cost of Equity of Kirloskar Electric Company Ltd (KECL.NS) is 16.60%.

The Cost of Debt of Kirloskar Electric Company Ltd (KECL.NS) is 17.15%.

	Range	Selected
Cost of equity	14.80% - 18.40%	16.60%
Tax rate	-% - 1.40%	0.70%
Cost of debt	15.40% - 18.90%	17.15%
WACC	14.9% - 18.5%	16.7%

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	0.96	1.14

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.80%	18.40%

Tax rate	-%	1.40%
Debt/Equity ratio	0.15	0.15
Cost of debt	15.40%	18.90%

After-tax WACC	14.9%	18.5%


Selected WACC	16.7%

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 (16.60%) = 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.