PPL.NS WACC - Weighted Average Cost of Capital

The WACC of Prakash Pipes Ltd (PPL.NS) is 18.0%.

The Cost of Equity of Prakash Pipes Ltd (PPL.NS) is 17.45%.

The Cost of Debt of Prakash Pipes Ltd (PPL.NS) is 33.45%.

	Range	Selected
Cost of equity	15.70% - 19.20%	17.45%
Tax rate	23.70% - 27.40%	25.55%
Cost of debt	7.50% - 59.40%	33.45%
WACC	14.9% - 21.0%	18.0%

WACC

PPL.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	1.06	1.22

Additional risk adjustments	0.0%	0.5%
Cost of equity	15.70%	19.20%

Tax rate	23.70%	27.40%
Debt/Equity ratio	0.08	0.08
Cost of debt	7.50%	59.40%

After-tax WACC	14.9%	21.0%


Selected WACC	18.0%

PPL.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 PPL.NS:

cost_of_equity (17.45%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (1.06) + 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.