SHILPAMED.NS WACC - Weighted Average Cost of Capital

The WACC of Shilpa Medicare Ltd (SHILPAMED.NS) is 14.8%.

The Cost of Equity of Shilpa Medicare Ltd (SHILPAMED.NS) is 15.70%.

The Cost of Debt of Shilpa Medicare Ltd (SHILPAMED.NS) is 10.05%.

	Range	Selected
Cost of equity	14.30% - 17.10%	15.70%
Tax rate	31.60% - 37.90%	34.75%
Cost of debt	10.00% - 10.10%	10.05%
WACC	13.6% - 16.0%	14.8%

WACC

SHILPAMED.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.89	0.99

Additional risk adjustments	0.0%	0.5%
Cost of equity	14.30%	17.10%

Tax rate	31.60%	37.90%
Debt/Equity ratio	0.11	0.11
Cost of debt	10.00%	10.10%

After-tax WACC	13.6%	16.0%


Selected WACC	14.8%

SHILPAMED.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 SHILPAMED.NS:

cost_of_equity (15.70%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.89) + 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.