KPITTECH.NS WACC - Weighted Average Cost of Capital

The WACC of KPIT Technologies Ltd (KPITTECH.NS) is 14.1%.

The Cost of Equity of KPIT Technologies Ltd (KPITTECH.NS) is 14.20%.

The Cost of Debt of KPIT Technologies Ltd (KPITTECH.NS) is 8.80%.

	Range	Selected
Cost of equity	12.10% - 16.30%	14.20%
Tax rate	24.00% - 25.50%	24.75%
Cost of debt	7.50% - 10.10%	8.80%
WACC	12.0% - 16.1%	14.1%

WACC

KPITTECH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.63	0.9

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.10%	16.30%

Tax rate	24.00%	25.50%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	10.10%

After-tax WACC	12.0%	16.1%


Selected WACC	14.1%

KPITTECH.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 KPITTECH.NS:

cost_of_equity (14.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.63) + 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.