STARCEMENT.NS WACC - Weighted Average Cost of Capital
The WACC of Star Cement Ltd (STARCEMENT.NS) is 15.1%.
| Range | Selected | |
| Cost of equity | 13.5% - 16.3% | 14.9% |
| Tax rate | 8.8% - 18.5% | 13.65% |
| Cost of debt | 7.6% - 50.8% | 29.2% |
| WACC | 13.4% - 16.7% | 15.1% |
| Category | Low | High |
| Long-term bond rate | 6.9% | 7.4% |
| Equity market risk premium | 8.3% | 9.3% |
| Adjusted beta | 0.8 | 0.91 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.5% | 16.3% |
| Tax rate | 8.8% | 18.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| Cost of debt | 7.6% | 50.8% |
| After-tax WACC | 13.4% | 16.7% |
| Selected WACC | 15.1% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| STARCEMENT.NS | Star Cement Ltd | 0.02 | 0.97 | 0.96 |
| HEIDELBERG.NS | Heidelbergcement India Ltd | 0.03 | 0.94 | 0.92 |
| HIL.NS | HIL Ltd | 0.56 | 1.02 | 0.68 |
| IFGLEXPOR.NS | IFGL Refractories Ltd | 0.12 | 1.11 | 1 |
| KESORAMIND.NS | Kesoram Industries Ltd | 16.72 | 0.6 | 0.04 |
| MANGLMCEM.NS | Mangalam Cement Ltd | 0.3 | 0.87 | 0.68 |
| ORIENTCEM.NS | Orient Cement Ltd | 0.01 | 0.11 | 0.11 |
| RAMCOIND.NS | Ramco Industries Ltd | 0.12 | 0.89 | 0.81 |
| SAGCEM.NS | Sagar Cements Ltd | 0.52 | 1.38 | 0.94 |
| VISAKAIND.NS | Visaka Industries Ltd | 1.07 | 0.84 | 0.43 |
| Low | High | |
| Unlevered beta | 0.68 | 0.85 |
| Relevered beta | 0.7 | 0.87 |
| Adjusted relevered beta | 0.8 | 0.91 |
STARCEMENT.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 STARCEMENT.NS:
cost_of_equity (14.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.8) + 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.