The WACC of Vardhman Polytex Ltd (VARDMNPOLY.NS) is 11.1%.
Range | Selected | |
Cost of equity | 10.6% - 13.3% | 11.95% |
Tax rate | 30.0% - 30.0% | 30% |
Cost of debt | 6.3% - 9.1% | 7.7% |
WACC | 9.8% - 12.5% | 11.1% |
Category | Low | High |
Long-term bond rate | 6.9% | 7.4% |
Equity market risk premium | 8.3% | 9.3% |
Adjusted beta | 0.45 | 0.58 |
Additional risk adjustments | 0.0% | 0.5% |
Cost of equity | 10.6% | 13.3% |
Tax rate | 30.0% | 30.0% |
Debt/Equity ratio | 0.14 | 0.14 |
Cost of debt | 6.3% | 9.1% |
After-tax WACC | 9.8% | 12.5% |
Selected WACC | 11.1% | |
Debt/Equity | Unlevered | |||
Peers | Company Name | ratio | Beta | beta |
VARDMNPOLY.NS | Vardhman Polytex Ltd | 0.14 | 1.34 | 1.22 |
500239.BO | K G Denim Ltd | 5.08 | 1.16 | 0.25 |
514030.BO | Deepak Spinners Ltd | 0.34 | -0.09 | -0.08 |
540396.BO | Manomay Tex India Ltd | 0.88 | -0.1 | -0.06 |
BRFL.NS | Bombay Rayon Fashions Ltd | 61.89 | 1.12 | 0.03 |
DCMNVL.NS | DCM Nouvelle Ltd | 1.01 | 1.47 | 0.86 |
DONEAR.NS | Donear Industries Ltd | 0.69 | 0.36 | 0.25 |
MORARJEE.NS | Morarjee Textiles Ltd | 23.97 | 0.01 | 0 |
SUPERHOUSE.NS | Super House Ltd | 0.71 | 0.85 | 0.57 |
SURYALAXMI.NS | Surya Lakshmi Cotton Mills Ltd | 1.94 | 1.14 | 0.48 |
Low | High | |
Unlevered beta | 0.16 | 0.35 |
Relevered beta | 0.18 | 0.37 |
Adjusted relevered beta | 0.45 | 0.58 |
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 VARDMNPOLY.NS:
cost_of_equity (11.95%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.45) + 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.