LTTS.NS WACC - Weighted Average Cost of Capital

The WACC of L&T Technology Services Ltd (LTTS.NS) is 14.0%.

The Cost of Equity of L&T Technology Services Ltd (LTTS.NS) is 14.05%.

The Cost of Debt of L&T Technology Services Ltd (LTTS.NS) is 8.50%.

	Range	Selected
Cost of equity	12.60% - 15.50%	14.05%
Tax rate	27.10% - 27.50%	27.30%
Cost of debt	7.50% - 9.50%	8.50%
WACC	12.5% - 15.4%	14.0%

WACC

LTTS.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.69	0.82

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.60%	15.50%

Tax rate	27.10%	27.50%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	9.50%

After-tax WACC	12.5%	15.4%


Selected WACC	14.0%

LTTS.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 LTTS.NS:

cost_of_equity (14.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.69) + 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.