ULTRACEMCO.NS WACC - Weighted Average Cost of Capital

The WACC of UltraTech Cement Ltd (ULTRACEMCO.NS) is 14.0%.

The Cost of Equity of UltraTech Cement Ltd (ULTRACEMCO.NS) is 14.55%.

The Cost of Debt of UltraTech Cement Ltd (ULTRACEMCO.NS) is 8.50%.

	Range	Selected
Cost of equity	12.50% - 16.60%	14.55%
Tax rate	22.90% - 25.30%	24.10%
Cost of debt	7.90% - 9.10%	8.50%
WACC	12.1% - 15.9%	14.0%

WACC

ULTRACEMCO.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.68	0.93

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.50%	16.60%

Tax rate	22.90%	25.30%
Debt/Equity ratio	0.07	0.07
Cost of debt	7.90%	9.10%

After-tax WACC	12.1%	15.9%


Selected WACC	14.0%

ULTRACEMCO.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 ULTRACEMCO.NS:

cost_of_equity (14.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.68) + 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.