RAMKY.NS WACC - Weighted Average Cost of Capital

The WACC of Ramky Infrastructure Ltd (RAMKY.NS) is 15.0%.

The Cost of Equity of Ramky Infrastructure Ltd (RAMKY.NS) is 16.65%.

The Cost of Debt of Ramky Infrastructure Ltd (RAMKY.NS) is 14.50%.

	Range	Selected
Cost of equity	14.20% - 19.10%	16.65%
Tax rate	25.20% - 45.40%	35.30%
Cost of debt	10.00% - 19.00%	14.50%
WACC	12.7% - 17.3%	15.0%

WACC

RAMKY.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.88	1.21

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.20%	19.10%

Tax rate	25.20%	45.40%
Debt/Equity ratio	0.27	0.27
Cost of debt	10.00%	19.00%

After-tax WACC	12.7%	17.3%


Selected WACC	15.0%

RAMKY.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 RAMKY.NS:

cost_of_equity (16.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.88) + 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.