RNAVAL.NS WACC - Weighted Average Cost of Capital
The WACC of Reliance Naval and Engineering Ltd (RNAVAL.NS) is 9.0%.
| Range | Selected | |
| Cost of equity | 73.8% - 89.0% | 81.4% |
| Tax rate | 30.0% - 30.0% | 30% |
| Cost of debt | 5.0% - 5.0% | 5% |
| WACC | 8.5% - 9.6% | 9.0% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 8.05 | 8.71 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 73.8% | 89.0% |
| Tax rate | 30.0% | 30.0% |
| Debt/Equity ratio | 13.08 | 13.08 |
| Cost of debt | 5.0% | 5.0% |
| After-tax WACC | 8.5% | 9.6% |
| Selected WACC | 9.0% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| RNAVAL.NS | Reliance Naval and Engineering Ltd | 13.08 | 0.66 | 0.06 |
| 505737.BO | International Combustion (India) Ltd | 0.14 | 1.21 | 1.11 |
| 522195.BO | Frontier Springs Ltd | 0 | 1.15 | 1.15 |
| 531859.BO | Oriental Rail Infrastructure Ltd | 0.24 | 1.34 | 1.15 |
| CEBBCO.NS | Commercial Engineers & Body Builders Co Ltd | 0.27 | 1.11 | 0.93 |
| COCHINSHIP.NS | Cochin Shipyard Ltd | 0.01 | 2 | 1.99 |
| EIMCOELECO.NS | Eimco Elecon India Ltd | 0 | 1.6 | 1.6 |
| GUJAPOLLO.NS | Gujarat Apollo Industries Ltd | 0.05 | 1.4 | 1.35 |
| REVATHI.NS | Revathi Equipment Ltd | 0.04 | 0.49 | 0.48 |
| SMLISUZU.NS | SML Isuzu Ltd | 0.17 | 2.01 | 1.8 |
| Low | High | |
| Unlevered beta | 1.13 | 1.23 |
| Relevered beta | 11.52 | 12.51 |
| Adjusted relevered beta | 8.05 | 8.71 |
RNAVAL.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 RNAVAL.NS:
cost_of_equity (81.40%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (8.05) + 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.