PIDILITIND.NS WACC - Weighted Average Cost of Capital

The WACC of Pidilite Industries Ltd (PIDILITIND.NS) is 13.5%.

The Cost of Equity of Pidilite Industries Ltd (PIDILITIND.NS) is 13.50%.

The Cost of Debt of Pidilite Industries Ltd (PIDILITIND.NS) is 8.70%.

	Range	Selected
Cost of equity	12.50% - 14.50%	13.50%
Tax rate	25.50% - 25.90%	25.70%
Cost of debt	7.50% - 9.90%	8.70%
WACC	12.4% - 14.5%	13.5%

WACC

PIDILITIND.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.67	0.72

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	14.50%

Tax rate	25.50%	25.90%
Debt/Equity ratio	0	0
Cost of debt	7.50%	9.90%

After-tax WACC	12.4%	14.5%


Selected WACC	13.5%

PIDILITIND.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 PIDILITIND.NS:

cost_of_equity (13.50%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.67) + 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.