PPL.NS WACC - Weighted Average Cost of Capital

The WACC of Prakash Pipes Ltd (PPL.NS) is 17.1%.

The Cost of Equity of Prakash Pipes Ltd (PPL.NS) is 16.80%.

The Cost of Debt of Prakash Pipes Ltd (PPL.NS) is 35.40%.

	Range	Selected
Cost of equity	14.70% - 18.90%	16.80%
Tax rate	24.80% - 28.50%	26.65%
Cost of debt	7.50% - 63.30%	35.40%
WACC	14.3% - 20.0%	17.1%

WACC

PPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.94	1.18

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.70%	18.90%

Tax rate	24.80%	28.50%
Debt/Equity ratio	0.04	0.04
Cost of debt	7.50%	63.30%

After-tax WACC	14.3%	20.0%


Selected WACC	17.1%

PPL.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 PPL.NS:

cost_of_equity (16.80%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.94) + 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.