The WACC of Punjab Chemicals and Crop Protection Ltd (PUNJABCHEM.NS) is 14.7%.
Range | Selected | |
Cost of equity | 13.5% - 16.7% | 15.1% |
Tax rate | 27.1% - 27.9% | 27.5% |
Cost of debt | 8.3% - 17.2% | 12.75% |
WACC | 12.9% - 16.4% | 14.7% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.8 | 0.95 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 13.5% | 16.7% |
Tax rate | 27.1% | 27.9% |
Debt/Equity ratio | 0.08 | 0.08 |
Cost of debt | 8.3% | 17.2% |
After-tax WACC | 12.9% | 16.4% |
Selected WACC | 14.7% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
PUNJABCHEM.NS | Punjab Chemicals and Crop Protection Ltd | 0.08 | 0.99 | 0.93 |
ATUL.NS | Atul Ltd | 0.01 | 1.01 | 1 |
BASF.NS | BASF India Ltd | 0.01 | 0.1 | 0.1 |
DCMSHRIRAM.NS | DCM Shriram Ltd | 0.1 | 0.56 | 0.52 |
GOCLCORP.NS | GOCL Corp Ltd | 0.64 | 1.66 | 1.13 |
JUBLINDS.NS | Jubilant Industries Ltd | 0.07 | 0.47 | 0.45 |
PIDILITIND.NS | Pidilite Industries Ltd | 0 | 0.75 | 0.75 |
PIIND.NS | PI Industries Ltd | 0 | 0.85 | 0.84 |
SRF.NS | SRF Ltd | 0.05 | 0.35 | 0.33 |
SUDARSCHEM.NS | Sudarshan Chemical Industries Ltd | 0.05 | 1.22 | 1.18 |
Low | High | |
Unlevered beta | 0.66 | 0.88 |
Relevered beta | 0.7 | 0.93 |
Adjusted relevered beta | 0.8 | 0.95 |
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 PUNJABCHEM.NS:
cost_of_equity (15.10%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.