POLYCAB.NS WACC - Weighted Average Cost of Capital

The WACC of Polycab India Ltd (POLYCAB.NS) is 16.1%.

The Cost of Equity of Polycab India Ltd (POLYCAB.NS) is 16.05%.

The Cost of Debt of Polycab India Ltd (POLYCAB.NS) is 20.90%.

	Range	Selected
Cost of equity	14.40% - 17.70%	16.05%
Tax rate	24.00% - 24.30%	24.15%
Cost of debt	7.50% - 34.30%	20.90%
WACC	14.2% - 17.9%	16.1%

WACC

POLYCAB.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.91	1.06

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.40%	17.70%

Tax rate	24.00%	24.30%
Debt/Equity ratio	0.02	0.02
Cost of debt	7.50%	34.30%

After-tax WACC	14.2%	17.9%


Selected WACC	16.1%

POLYCAB.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 POLYCAB.NS:

cost_of_equity (16.05%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.91) + 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.