COST OF EQUITY

2021
Dividend per share (2021) = 22.75 Dividend per share (2020) =
Share Price ( as on 31.3.2021) = Share Price ( as on 31.3.2020) =
Growth rate = ROE ( 1- DPR) Growth rate = ROE ( 1- DPR)
DPR = dividend / EPS * 100 DPR = dividend / EPS * 100
EPS ( Basic ) = 70.57 EPS ( Basic ) =
DPR = 22.75 / 70.75 * 100 = 32.15% DPR = 9.75 / 17.31 *100 =
ROE 29.46% ROE =
Growth rate = 29.46 % ( 1 - 32.15%) Growth rate = 9.1 % (1 - 56.32%
= 19.98% = 3.974

Do(1+r)
Ke= +r Ke=
Po
22.75(1+0.1998)
Ke= + 0.1998 Ke=
1452.41
= 21.85%

EXPECTED RATE OF RETURN

2021 2020
Rf=7.15% Rf=7.15%
Rm(Nifty 50) = 13.48% Rm(Nifty 50) = 14.08%
Beta=0.75 Beta=0.75

E(Ri) = Rf+beta(Rm-Rf) E(Ri)= Rf+beta(Rm-Rf)

E(Ri)= 7.15%+0.75(21.2%-7.15%) E(Ri)= 7.15%+0.75 (14.08%-7.15%)
= 11.54% = 5.69%

Financial Leverage
2021 2020
Interest = 914.73 Interest = 1,081.72
EBT = 14,246.79 EBT = 1,572.59
EBIT = Interest + EBT EBIT = Interest + EBT
EBIT = 914.73 + 14246.79 EBIT = 1081.72 + 1572.59
EBIT = 15161.52 EBIT = 2654.31
EBIT EBIT
ancial Leverage= Financial Leverage=
EBIT-Intrest EBIT-Intrest

= 15161.52 = 2654.31
15161.52-914.73 2645.31-1081.72
= 1.064 = 1.68
 ###
hare (2020) = 9.75
on 31.3.2020) = 190.10
ROE ( 1- DPR)
PR = dividend / EPS * 100
PS ( Basic ) = 17.31
PR = 9.75 / 17.31 *100 = 56.32%
OE = 9.10%
wth rate = 9.1 % (1 - 56.32%)
= 3.974%

Do(1+r)
+r
Po
9.75(1+0.03974)
+ 0.03974
190
= 9.30%

ETURN
2019
Rf=7.15%
Rm(Nifty 50 ) = 21.2%
Beta=0.75

E(Ri)= Rf+beta(Rm-Rf)
4.08%-7.15%) E(Ri)= 7.15%+0.75(13.48%-7.15%)
= 5.20%

ge
2019
Interest = 725.94
EBT = 9,338.66
EBIT = Interest + EBT
EBIT = 725.94 + 9338.66
EBIT = 10064.6
EBIT
Financial Leverage=
EBIT-Intrest

= 10064.6
10064.6 - 725.94
= 1.077
Dividend per share (2019) = 15.90
Share Price ( as on 31.3.2019) = 272.45
Growth rate = ROE ( 1- DPR)
DPR = dividend / EPS * 100
EPS ( Basic ) = 39.56
DPR = 15.9 / 39.56 * 100 = 40.19%
ROE = 21.39%
Growth rate = 21.39% (1-40.19%)
=12.79%

Ke= +r

Ke= + 0.1279

CALCULATION OF Rm

Operati
2021
% change in EBIT= 314.56%
% change in sales= -5.94%
% change in EBIT
% change in sales
314.56%
-5.94%
-52.96

PERCENT
EBIT

% Change in EBIT

Sales

% Change in sales

EPS

% Change in EPS
 COST OF DEBT

2021
Intrest=₹ 914.73 Crore
Long term Debt=₹ 27,069.72 crores
Tax expense =₹3,582.91
EBT = 14,246.79
Tax rate = Tax expense / EBT*100
Tax rate = 3582.91/14246.79*100
Tax rate = 25.14%
Intrest(1-Tax Rate)
Kd=
Debt
914,73(1-25.14%)
Kd=
###
= ###

Closing price

10799.8
12255.85

13981.95
16955.45

Operating Leverage
2021 2020
= 314.56% % change in EBIT= -63.66%
= -5.94% % change in sales= -3.20%
% change in EBIT
Operating Leverage=
% change in sales
-63.66%
=
-3.20%
= 19.89

PERCENTAGE CHANGE
2021 2020 2019 ###
15161.52 3657.24 10064.6 ###

314.56% -63.66% 3.03%

270,326.32 287,416.93 296,946.31 ###

-5.94% -3.20% 21.65%

70.57 17.31 39.56 ###

307.60% -56.24% -5.177%

 COST OF DEBT

Cost of Debt
2021 2020 2019
Intrest=₹1,081.72 crores Intrest=₹725.94 crores
rores Long term Debt=₹22,287.17 crores Long term Debt=₹11,317.22 crores
Tax expense =₹ (1,064.67) Tax expense = 3,310.00
EBT = 1,572.59 EBT = 9,338.66
Tax rate = Tax expense / EBT*100 Tax rate = Tax expense / EBT*100
Tax rate = (1,064.67) / 1572.59*100 Tax rate = 3310.00 / 9,338.66*100
Tax rate = (67.70) % Tax rate = 35.44%
Intrest(1-Tax Ra
X100 Kd= X100 Kd=
Debt
1081.72(1-(-67.70%))
X 100 Kd= X 100 Kd=
22287.17
= 8.14% =

Year Calculation

2019 12255.85-10799.8/10799.8*100 = 13.48%

2020 13981.95-12255.85/12255.85*100 = 14.08%
2021 16955.45-13981.95/13981.95*100 = 21.2%

2019 2021
% change in EBIT= 3.03% Financial Leverage=
% change in sales= 21.65% Operating Leverage= -52.96
% change in EBIT
Operating Leverage=
% change in sales Combined Leverage=
3.03% =
=
21.65% =
= 0.14
 2019
5.94 crores
ebt=₹11,317.22 crores
= 3,310.00

ax expense / EBT*100
310.00 / 9,338.66*100

Intrest(1-Tax Rate)
X100
Debt
725.94(1-35.44%)
X 100
11317.22
4.14%

Combined Leverage
2021 2020
verage= Financial Leverage= 0.088
everage= -52.96 Operating Leverage= 19.89

Financial Leverage X Operating Leverage Combined Leverage=

0.977 X -52.96 =
-51.74 =
 2020 2019
rage= 0.088 Financial Leverage=- 1.7
erage= 19.89 Operating Leverage= 0.14

Financial Leverage X Operating Leverage Combined

Financial Leverage X Operating Leverage
0.088 X 19.89 = -1.7 X 0.14
1.750 = - 0.238