The WACC of Shivam Autotech Ltd (SHIVAMAUTO.NS) is 17.5%.
Range | Selected | |
Cost of equity | 15.6% - 18.7% | 17.15% |
Tax rate | 5.5% - 6.7% | 6.1% |
Cost of debt | 11.6% - 26.9% | 19.25% |
WACC | 13.3% - 21.7% | 17.5% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 1.05 | 1.16 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 15.6% | 18.7% |
Tax rate | 5.5% | 6.7% |
Debt/Equity ratio | 0.91 | 0.91 |
Cost of debt | 11.6% | 26.9% |
After-tax WACC | 13.3% | 21.7% |
Selected WACC | 17.5% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SHIVAMAUTO.NS | Shivam Autotech Ltd | 0.91 | 1.74 | 0.94 |
513252.BO | Jay Ushin Ltd | 0.57 | 0.29 | 0.19 |
523229.BO | Bharat Seats Ltd | 0.23 | 1.29 | 1.06 |
523248.BO | Machino Plastics Ltd | 1.08 | 1.35 | 0.67 |
538987.BO | Talbros Engineering Ltd | 0.45 | 0.96 | 0.68 |
BHARATGEAR.NS | Bharat Gears Ltd | 0.58 | 0.83 | 0.54 |
OMAXAUTO.NS | Omax Autos Ltd | 0.4 | 1.34 | 0.97 |
PPAP.NS | PPAP Automotive Ltd | 0.49 | 0.87 | 0.6 |
SETCO.NS | Setco Automotive Ltd | 4.11 | 1.3 | 0.27 |
UCALFUEL.NS | UCAL Fuel Systems Ltd | 0.67 | 0.8 | 0.49 |
Low | High | |
Unlevered beta | 0.57 | 0.67 |
Relevered beta | 1.07 | 1.24 |
Adjusted relevered beta | 1.05 | 1.16 |
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 SHIVAMAUTO.NS:
cost_of_equity (17.15%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.05) + 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.