SHILPAMED.NS
Shilpa Medicare Ltd
Price:  
870.25 
INR
Volume:  
54,506.00
India | Pharmaceuticals
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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.