NH.NS WACC - Weighted Average Cost of Capital

The WACC of Narayana Hrudayalaya Ltd (NH.NS) is 12.1%.

The Cost of Equity of Narayana Hrudayalaya Ltd (NH.NS) is 12.35%.

The Cost of Debt of Narayana Hrudayalaya Ltd (NH.NS) is 6.80%.

	Range	Selected
Cost of equity	11.00% - 13.70%	12.35%
Tax rate	20.00% - 22.70%	21.35%
Cost of debt	5.80% - 7.80%	6.80%
WACC	10.7% - 13.4%	12.1%

WACC

NH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.5	0.63

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	13.70%

Tax rate	20.00%	22.70%
Debt/Equity ratio	0.05	0.05
Cost of debt	5.80%	7.80%

After-tax WACC	10.7%	13.4%


Selected WACC	12.1%

NH.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 NH.NS:

cost_of_equity (12.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.5) + 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.