LTTS.NS WACC - Weighted Average Cost of Capital
The WACC of L&T Technology Services Ltd (LTTS.NS) is 13.9%.
| Range | Selected | |
| Cost of equity | 12.4% - 15.6% | 14% |
| Tax rate | 27.1% - 27.5% | 27.3% |
| Cost of debt | 7.5% - 9.5% | 8.5% |
| WACC | 12.3% - 15.5% | 13.9% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.66 | 0.84 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.4% | 15.6% |
| Tax rate | 27.1% | 27.5% |
| Debt/Equity ratio | 0.01 | 0.01 |
| Cost of debt | 7.5% | 9.5% |
| After-tax WACC | 12.3% | 15.5% |
| Selected WACC | 13.9% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| LTTS.NS | L&T Technology Services Ltd | 0.01 | 1.24 | 1.23 |
| 002781.SZ | Shenzhen Qixin Group Co Ltd | 15.43 | -0.26 | -0.02 |
| 002789.SZ | Shenzhen Jianyi Decoration Group Co Ltd | 2.86 | 1.17 | 0.38 |
| 538539.BO | J Taparia Projects Ltd | 0.03 | 0.79 | 0.78 |
| 603018.SS | Huashe Design Group Co Ltd | 0.19 | 1.24 | 1.09 |
| 6532.T | BayCurrent Consulting Inc | 0.01 | 0.55 | 0.55 |
| 9232.T | Pasco Corp | 0.9 | 0.11 | 0.07 |
| ALQ.AX | ALS Ltd | 0.23 | 0.85 | 0.73 |
| IPH.AX | IPH Ltd | 0.33 | 0.51 | 0.41 |
| REPL.NS | Rudrabhishek Enterprises Ltd | 0.03 | 1.26 | 1.23 |
| Low | High | |
| Unlevered beta | 0.49 | 0.75 |
| Relevered beta | 0.49 | 0.76 |
| Adjusted relevered beta | 0.66 | 0.84 |
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 (14.00%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.66) + 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.