SSWL.NS WACC - Weighted Average Cost of Capital
The WACC of Steel Strips Wheels Ltd (SSWL.NS) is 14.5%.
| Range | Selected | |
| Cost of equity | 15.2% - 18.1% | 16.65% |
| Tax rate | 26.2% - 30.0% | 28.1% |
| Cost of debt | 9.1% - 11.1% | 10.1% |
| WACC | 13.3% - 15.8% | 14.5% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 1 | 1.1 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 15.2% | 18.1% |
| Tax rate | 26.2% | 30.0% |
| Debt/Equity ratio | 0.29 | 0.29 |
| Cost of debt | 9.1% | 11.1% |
| After-tax WACC | 13.3% | 15.8% |
| Selected WACC | 14.5% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| SSWL.NS | Steel Strips Wheels Ltd | 0.29 | 0.85 | 0.7 |
| BANCOINDIA.NS | Banco Products (India) Ltd | 0.07 | 1.61 | 1.53 |
| DYNAMATECH.NS | Dynamatic Technologies Ltd | 0.12 | 0.91 | 0.83 |
| FIEMIND.NS | Fiem Industries Ltd | 0.01 | 1.14 | 1.13 |
| JAYBARMARU.NS | Jay Bharat Maruti Ltd | 0.59 | 0.94 | 0.66 |
| LUMAXIND.NS | Lumax Industries Ltd | 0.29 | 0.98 | 0.81 |
| PRICOLLTD.NS | Pricol Ltd | 0.01 | 0.88 | 0.87 |
| RICOAUTO.NS | Rico Auto Industries Ltd | 0.71 | 1.62 | 1.07 |
| RML.NS | Rane (Madras) Ltd | 0.54 | 1.74 | 1.25 |
| SHRIPISTON.NS | Shriram Pistons & Rings Ltd | 0.03 | 0.85 | 0.83 |
| Low | High | |
| Unlevered beta | 0.83 | 0.95 |
| Relevered beta | 1 | 1.15 |
| Adjusted relevered beta | 1 | 1.1 |
SSWL.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 SSWL.NS:
cost_of_equity (16.65%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1) + 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.