PETRONET.NS WACC - Weighted Average Cost of Capital
The WACC of Petronet LNG Ltd (PETRONET.NS) is 13.0%.
| Range | Selected | |
| Cost of equity | 12.2% - 14.8% | 13.5% |
| Tax rate | 24.9% - 25.2% | 25.05% |
| Cost of debt | 4.0% - 7.5% | 5.75% |
| WACC | 11.6% - 14.3% | 13.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.64 | 0.75 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 12.2% | 14.8% |
| Tax rate | 24.9% | 25.2% |
| Debt/Equity ratio | 0.06 | 0.06 |
| Cost of debt | 4.0% | 7.5% |
| After-tax WACC | 11.6% | 14.3% |
| Selected WACC | 13.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| PETRONET.NS | Petronet LNG Ltd | 0.06 | 0.76 | 0.73 |
| 002221.SZ | Oriental Energy Co Ltd | 1.59 | 1.1 | 0.5 |
| 017940.KS | E1 Corp | 12.3 | 0.78 | 0.08 |
| 018670.KS | SK Gas Ltd | 1.03 | 0.64 | 0.36 |
| 332.HK | Yuan Heng Gas Holdings Ltd | 9.92 | 0.22 | 0.03 |
| 600387.SS | HY Energy Group Co Ltd | 1.21 | 1.2 | 0.63 |
| 8088.T | Iwatani Corp | 0.65 | 0.97 | 0.65 |
| AKRA.JK | AKR Corporindo Tbk PT | 0.22 | 0.86 | 0.74 |
| PLX.VN | Vietnam National Petroleum Group | 0.4 | 0.75 | 0.58 |
| Y35.SI | AnAn International Ltd | 6.98 | -1.13 | -0.18 |
| Low | High | |
| Unlevered beta | 0.45 | 0.6 |
| Relevered beta | 0.46 | 0.63 |
| Adjusted relevered beta | 0.64 | 0.75 |
PETRONET.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 PETRONET.NS:
cost_of_equity (13.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.64) + 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.