AJANTPHARM.NS WACC - Weighted Average Cost of Capital

The WACC of Ajanta Pharma Ltd (AJANTPHARM.NS) is 12.5%.

The Cost of Equity of Ajanta Pharma Ltd (AJANTPHARM.NS) is 12.55%.

The Cost of Debt of Ajanta Pharma Ltd (AJANTPHARM.NS) is 15.65%.

	Range	Selected
Cost of equity	11.00% - 14.10%	12.55%
Tax rate	22.20% - 22.90%	22.55%
Cost of debt	7.50% - 23.80%	15.65%
WACC	11.0% - 14.1%	12.5%

WACC

AJANTPHARM.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.49	0.67

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.00%	14.10%

Tax rate	22.20%	22.90%
Debt/Equity ratio	0	0
Cost of debt	7.50%	23.80%

After-tax WACC	11.0%	14.1%


Selected WACC	12.5%

AJANTPHARM.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 AJANTPHARM.NS:

cost_of_equity (12.55%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.49) + 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.