SRIPIPES.NS WACC - Weighted Average Cost of Capital

The WACC of Srikalahasthi Pipes Ltd (SRIPIPES.NS) is 14.9%.

The Cost of Equity of Srikalahasthi Pipes Ltd (SRIPIPES.NS) is 17.20%.

The Cost of Debt of Srikalahasthi Pipes Ltd (SRIPIPES.NS) is 10.75%.

	Range	Selected
Cost of equity	16.00% - 18.40%	17.20%
Tax rate	26.70% - 27.50%	27.10%
Cost of debt	9.90% - 11.60%	10.75%
WACC	13.9% - 16.0%	14.9%

WACC

SRIPIPES.NS WACC calculation

Category	Low	High

Long-term bond rate	7.5%	8.0%
Equity market risk premium	6.9%	7.9%
Adjusted beta	1.23	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	16.00%	18.40%

Tax rate	26.70%	27.50%
Debt/Equity ratio	0.32	0.32
Cost of debt	9.90%	11.60%

After-tax WACC	13.9%	16.0%


Selected WACC	14.9%

SRIPIPES.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 SRIPIPES.NS:

cost_of_equity (17.20%) = risk_free_rate (7.75%) + equity_risk_premium (7.40%) * adjusted_beta (1.23) + 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.