NH.NS WACC - Weighted Average Cost of Capital

The WACC of Narayana Hrudayalaya Ltd (NH.NS) is 14.3%.

The Cost of Equity of Narayana Hrudayalaya Ltd (NH.NS) is 14.90%.

The Cost of Debt of Narayana Hrudayalaya Ltd (NH.NS) is 7.00%.

	Range	Selected
Cost of equity	13.70% - 16.10%	14.90%
Tax rate	17.80% - 19.70%	18.75%
Cost of debt	6.40% - 7.60%	7.00%
WACC	13.2% - 15.4%	14.3%

WACC

NH.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.83	0.88

Additional risk adjustments	0.0%	0.5%
Cost of equity	13.70%	16.10%

Tax rate	17.80%	19.70%
Debt/Equity ratio	0.07	0.07
Cost of debt	6.40%	7.60%

After-tax WACC	13.2%	15.4%


Selected WACC	14.3%

NH.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 NH.NS:

cost_of_equity (14.90%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.83) + 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.