The WACC of SPML Infra Ltd (SPMLINFRA.NS) is 10.9%.
Range | Selected | |
Cost of equity | 10.2% - 16.2% | 13.2% |
Tax rate | 30.0% - 30.0% | 30% |
Cost of debt | 4.0% - 7.5% | 5.75% |
WACC | 8.4% - 13.5% | 10.9% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.4 | 0.89 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.2% | 16.2% |
Tax rate | 30.0% | 30.0% |
Debt/Equity ratio | 0.32 | 0.32 |
Cost of debt | 4.0% | 7.5% |
After-tax WACC | 8.4% | 13.5% |
Selected WACC | 10.9% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
SPMLINFRA.NS | SPML Infra Ltd | 0.32 | 0.63 | 0.51 |
511411.BO | Shristi Infrastructure Development Corporation Ltd | 4.91 | 0.17 | 0.04 |
ARSSINFRA.NS | ARSS Infrastructure Projects Ltd | 13.13 | 0.59 | 0.06 |
CANDC.NS | C & C Constructions Ltd | 201.67 | 1.16 | 0.01 |
INDIANHUME.NS | Indian Hume Pipe Company Ltd | 0.19 | 1.91 | 1.69 |
JPINFRATEC.NS | Jaypee Infratech Ltd | 54.3 | 1.87 | 0.05 |
POWERMECH.NS | Power Mech Projects Ltd | 0.04 | 2.03 | 1.98 |
RAMKY.NS | Ramky Infrastructure Ltd | 0.15 | 2.09 | 1.9 |
SHRIRAMEPC.NS | Shriram EPC Ltd | 1 | 1.62 | 0.95 |
SUPREMEINF.NS | Supreme Infrastructure India Ltd | 13.74 | 1.07 | 0.1 |
Low | High | |
Unlevered beta | 0.08 | 0.69 |
Relevered beta | 0.1 | 0.84 |
Adjusted relevered beta | 0.4 | 0.89 |
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 SPMLINFRA.NS:
cost_of_equity (13.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.4) + 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.