HSCL.NS WACC - Weighted Average Cost of Capital

The WACC of Himadri Speciality Chemical Ltd (HSCL.NS) is 17.1%.

The Cost of Equity of Himadri Speciality Chemical Ltd (HSCL.NS) is 17.20%.

The Cost of Debt of Himadri Speciality Chemical Ltd (HSCL.NS) is 7.95%.

	Range	Selected
Cost of equity	15.80% - 18.60%	17.20%
Tax rate	26.00% - 27.50%	26.75%
Cost of debt	7.50% - 8.40%	7.95%
WACC	15.7% - 18.5%	17.1%

WACC

HSCL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.07	1.16

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.80%	18.60%

Tax rate	26.00%	27.50%
Debt/Equity ratio	0.01	0.01
Cost of debt	7.50%	8.40%

After-tax WACC	15.7%	18.5%


Selected WACC	17.1%

HSCL.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 HSCL.NS:

cost_of_equity (17.20%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.07) + 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.