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HDFC Bank Limited (HDB) — WACC Analysis

WACC Breakdown

HDFC Bank Limited (HDB) has a weighted average cost of capital (WACC) of 13.8%. The cost of equity is 9.2%, derived from a beta of 1.00 and a risk-free rate of 5.0%. The after-tax cost of debt is 20.3%. The capital structure is 58.4% equity and 41.6% debt.

Interpretation

A WACC of 13.8% indicates that the market perceives HDFC Bank Limited as higher-risk, requiring a greater return to compensate investors.

Investors can compare HDB's WACC of 13.8% against industry peers to gauge its relative financing costs. A beta of 1.00 reflects the stock's volatility relative to the broader market.

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VALUATION

HDB WACC: 13.81% for HDFC Bank Limited

Current inputs imply a 9.19% cost of equity and a 25.68% pre-tax cost of debt. Use this discount rate as a starting point for DCF validation.

[01]Current Market Data
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WACC Calculation Process
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Market Data Loaded
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Company Data Fetched
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Beta Calculated (5Y)
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Inputs Auto-Populated
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WACC Calculated
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Step 2: Enter Ticker Symbol
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Step 4: Review Auto-Populated WACC Inputs

Values are automatically populated from real data. You can adjust them manually if needed.

4.30%
1.000
4.23%
5.00%
21.00%
70.00%
Debt: 30.00%Equity: 70.00%

Please enter a valid company ticker to calculate WACC

HDFC Bank Limited Common Stock (HDB) WACC Results
Weighted Average Cost of Capital
13.81%
Cost of Equity
9.19%
Risk-Free Rate4.96%
Beta1.00
Market Risk Premium4.23%
Cost of Debt
20.29%
Pre-Tax Cost of Debt25.68%
Tax Rate21.00%
Tax Shield5.39%
Capital Structure
Equity: 58.35%($117.61B)
Debt: 41.65%($83.94B)
Equity Component
5.36%
58.35% × 9.19%
Debt Component
8.45%
41.65% × 20.29%

HDFC Bank Limited (HDB) WACC in context

HDFC Bank Limited (HDB) currently screens with an estimated WACC of 13.81%. That blends a 9.19% cost of equity, a 25.68% pre-tax cost of debt, and a 58.35% equity weight into the discount rate you would typically use in a DCF model.

screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

What HDB WACC implies

A 13.81% discount rate screens as a relatively high discount rate, which makes valuation more sensitive to execution and capital structure risk.

How this page calculates HDB

This page combines CAPM-based cost of equity with SEC-derived debt and capital structure inputs. The current beta is 1.00 and equity accounts for 58.35% of capital.

What to do next

Validate business quality on the company page, then carry the same discount-rate assumptions into the DCF page to test fair value sensitivity.

Disclaimer: This is not financial advice. Data sourced from SEC EDGAR and Polygon.io. Past performance does not guarantee future results. Always conduct your own research before making investment decisions.