SDBL.NS WACC - Weighted Average Cost of Capital

The WACC of SOM Distilleries and Breweries Ltd (SDBL.NS) is 14.7%.

The Cost of Equity of SOM Distilleries and Breweries Ltd (SDBL.NS) is 15.25%.

The Cost of Debt of SOM Distilleries and Breweries Ltd (SDBL.NS) is 7.30%.

	Range	Selected
Cost of equity	13.50% - 17.00%	15.25%
Tax rate	18.70% - 24.20%	21.45%
Cost of debt	7.10% - 7.50%	7.30%
WACC	13.0% - 16.3%	14.7%

WACC

SDBL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.79	0.98

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.50%	17.00%

Tax rate	18.70%	24.20%
Debt/Equity ratio	0.06	0.06
Cost of debt	7.10%	7.50%

After-tax WACC	13.0%	16.3%


Selected WACC	14.7%

SDBL.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 SDBL.NS:

cost_of_equity (15.25%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.79) + 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.