The WACC of Shree Renuka Sugars Ltd (RENUKA.NS) is 18.0%.
Range | Selected | |
Cost of equity | 20.6% - 23.7% | 22.15% |
Tax rate | 14.2% - 24.7% | 19.45% |
Cost of debt | 9.7% - 23.9% | 16.8% |
WACC | 15.0% - 21.1% | 18.0% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 1.66 | 1.7 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 20.6% | 23.7% |
Tax rate | 14.2% | 24.7% |
Debt/Equity ratio | 0.84 | 0.84 |
Cost of debt | 9.7% | 23.9% |
After-tax WACC | 15.0% | 21.1% |
Selected WACC | 18.0% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
RENUKA.NS | Shree Renuka Sugars Ltd | 0.84 | 1.97 | 1.16 |
AVANTIFEED.NS | Avanti Feeds Ltd | 0 | 1.2 | 1.2 |
BALRAMCHIN.NS | Balrampur Chini Mills Ltd | 0.22 | 1.38 | 1.17 |
DAAWAT.NS | LT Foods Ltd | 0.17 | 1.49 | 1.31 |
DALMIASUG.NS | Dalmia Bharat Sugar and Industries Ltd | 0.33 | 2.06 | 1.62 |
GOKUL.NS | Gokul Refoils and Solvent Ltd | 0.63 | 1.11 | 0.73 |
KRBL.NS | KRBL Ltd | 0.04 | 1.47 | 1.41 |
PARAGMILK.NS | Parag Milk Foods Ltd | 0.23 | 0.93 | 0.78 |
SANWARIA.NS | Sanwaria Consumer Ltd | 24.93 | 0.16 | 0.01 |
TRIVENI.NS | Triveni Engineering and Industries Ltd | 0.24 | 1.46 | 1.22 |
Low | High | |
Unlevered beta | 1.17 | 1.21 |
Relevered beta | 1.99 | 2.04 |
Adjusted relevered beta | 1.66 | 1.7 |
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 RENUKA.NS:
cost_of_equity (22.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.66) + 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.