The WACC of Parenteral Drugs (India) Ltd (PDPL.NS) is 13.1%.
Range | Selected | |
Cost of equity | 49.0% - 86.6% | 67.8% |
Tax rate | 25.6% - 27.1% | 26.35% |
Cost of debt | 7.0% - 16.6% | 11.8% |
WACC | 8.5% - 17.6% | 13.1% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 5.06 | 8.46 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 49.0% | 86.6% |
Tax rate | 25.6% | 27.1% |
Debt/Equity ratio | 12.4 | 12.4 |
Cost of debt | 7.0% | 16.6% |
After-tax WACC | 8.5% | 17.6% |
Selected WACC | 13.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PDPL.NS | Parenteral Drugs (India) Ltd | 12.4 | 0.38 | 0.04 |
506919.BO | Makers Laboratories Ltd | 0.14 | 2.07 | 1.87 |
524202.BO | Lactose India Ltd | 0.31 | 0.66 | 0.54 |
524711.BO | Vista Pharmaceuticals Ltd | 0.12 | 0.54 | 0.5 |
530233.BO | Auro Laboratories Ltd | 0.16 | 0.9 | 0.81 |
531726.BO | Panchsheel Organics Ltd | 0.03 | 1.22 | 1.19 |
538965.BO | Concord Drugs Ltd | 0.55 | 0.52 | 0.37 |
ALPA.NS | Alpa Laboratories Ltd | 0.02 | 1.24 | 1.21 |
LYKALABS.NS | Lyka Labs Ltd | 0.14 | 1.4 | 1.27 |
VAISHALI.NS | Vaishali Pharma Ltd | 0.1 | 1.77 | 1.65 |
Low | High | |
Unlevered beta | 0.7 | 1.2 |
Relevered beta | 7.06 | 12.13 |
Adjusted relevered beta | 5.06 | 8.46 |
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 PDPL.NS:
cost_of_equity (67.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (5.06) + 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.