KIRLOSIND.NS WACC - Weighted Average Cost of Capital

The WACC of Kirloskar Industries Ltd (KIRLOSIND.NS) is 14.8%.

The Cost of Equity of Kirloskar Industries Ltd (KIRLOSIND.NS) is 17.95%.

The Cost of Debt of Kirloskar Industries Ltd (KIRLOSIND.NS) is 8.85%.

	Range	Selected
Cost of equity	16.70% - 19.20%	17.95%
Tax rate	27.90% - 32.10%	30.00%
Cost of debt	8.30% - 9.40%	8.85%
WACC	13.8% - 15.7%	14.8%

WACC

KIRLOSIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.18	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.70%	19.20%

Tax rate	27.90%	32.10%
Debt/Equity ratio	0.37	0.37
Cost of debt	8.30%	9.40%

After-tax WACC	13.8%	15.7%


Selected WACC	14.8%

KIRLOSIND.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 KIRLOSIND.NS:

cost_of_equity (17.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.18) + 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.