LSIL.NS WACC - Weighted Average Cost of Capital

The WACC of Lloyds Steels Industries Ltd (LSIL.NS) is 12.7%.

The Cost of Equity of Lloyds Steels Industries Ltd (LSIL.NS) is 12.75%.

The Cost of Debt of Lloyds Steels Industries Ltd (LSIL.NS) is 15.90%.

	Range	Selected
Cost of equity	11.50% - 14.00%	12.75%
Tax rate	24.70% - 26.00%	25.35%
Cost of debt	7.90% - 23.90%	15.90%
WACC	11.4% - 14.0%	12.7%

WACC

LSIL.NS WACC calculation

Category	Low	High

Long-term bond rate	7.2%	7.7%
Equity market risk premium	8.8%	9.8%
Adjusted beta	0.48	0.59

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.50%	14.00%

Tax rate	24.70%	26.00%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.90%	23.90%

After-tax WACC	11.4%	14.0%


Selected WACC	12.7%

LSIL.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 LSIL.NS:

cost_of_equity (12.75%) = risk_free_rate (7.45%) + equity_risk_premium (9.30%) * adjusted_beta (0.48) + 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.