As of today (2026-07-03), Azure Power Global's weighted average cost of capital is 8.8%%. Azure Power Global's ROIC % is 0.00% (calculated using TTM income statement data).
Azure Power Global earns returns that do not match up to its cost of capital. It will destroy value as it grows.
For a comprehensive WACC calculation, please access the WACC Calculator.
Azure Power Global (OTCPK:AZREF) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Azure Power Global's weighted average cost of capital is 8.8%%. Azure Power Global's ROIC % is 0.00% (calculated using TTM income statement data).
Azure Power Global earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest annual Interest Expense divided by the latest one-year annual average debt to get the simplified cost of debt.
Related Terms
Azure Power Global WACC % Historical Data
* Premium members only.
The historical data trend for Azure Power Global's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Utilities - Renewable subindustry, Azure Power Global's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Azure Power Global WACC % vs Utilities - Independent Power Producers Industry
For the Utilities - Independent Power Producers industry and Utilities sector, Azure Power Global's WACC % distribution charts can be found below:
* The bar in red indicates where Azure Power Global's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Azure Power Global's market capitalization (E) is $64.166 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2024, Azure Power Global's latest one-year annual average Book Value of Debt (D) is $1584.9355 Mil.
a) weight of equity = E / (E + D) = 64.166 / (64.166 + 1584.9355) = 0.0389
b) weight of debt = D / (E + D) = 1584.9355 / (64.166 + 1584.9355) = 0.9611
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 7.02%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Azure Power Global's beta is -0.7243.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 7.02% + -0.7243 * 6% = 2.6742%
3. Cost of Debt:
GuruFocus uses latest annual Interest Expense divided by the latest one-year annual average debt to get the simplified cost of debt.
As of Mar. 2024, Azure Power Global's interest expense (positive number) was $143.337 Mil. Its total Book Value of Debt (D) is $1584.9355 Mil.
Cost of Debt = 143.337 / 1584.9355 = 9.0437%.
4. Multiply by one minus annual Tax Rate:
GuruFocus uses the most recent annual Tax Expense divided by the most recent annual Pre-Tax Income to calculate the tax rate. The calculated annual tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated annual Tax Rate = 2.192 / -38.797 = -5.65%, which is less than 0%. Therefore it's set to 0%.
Azure Power Global's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.0389
*
2.6742%
+
0.9611
*
9.0437%
*
(1 - 0%)
=
8.8%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Azure Power Global (AZREF) has a WACC % of 8.8% as of Jul. 03, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Azure Power Global and its competitors.
Is Azure Power Global's WACC % too high?
Azure Power Global's current WACC % is 8.8%. The Utilities - Independent Power Producers industry median WACC % is 7.76. Azure Power Global's value of 8.8% is 13.4% above this industry median. Overall, Azure Power Global has a GF Score™ of 12/100, reflecting its overall financial health beyond just this single metric.
How does Azure Power Global's WACC % compare to SAFX and VGAS?
Azure Power Global's WACC % of 8.8% can be compared against companies in the Utilities - Independent Power Producers industry. The industry median WACC % is 7.76. Azure Power Global's value of 8.8% is 13.4% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Utilities - Independent Power Producers company?
The median WACC % among Utilities - Independent Power Producers companies is 7.76, based on 477 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Azure Power Global's current WACC % of 8.8% is 13.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Azure Power Global and its competitors. For the Utilities - Independent Power Producers industry, the median WACC % is 7.76 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Azure Power Global's current WACC % is 8.8%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Azure Power Global stock overvalued right now?
Azure Power Global (AZREF) has a current WACC % of 8.8%. The current WACC % is 8.8% and 13.4% above the Utilities - Independent Power Producers industry median of 7.76. Azure Power Global's overall GF Score™ is 12/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Azure Power Global (AZREF), the current WACC % is 8.8% as of Jul. 03, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Azure Power Global Ltd is a utility-scale renewable energy project developer and operator. It is engaged in the development, construction, ownership, operation, maintenance, and management of renewable energy assets based on long-term contracts (Power Purchase Agreements or PPA) with Indian Government energy distribution companies, as well as other Indian non-governmental energy distribution companies and commercial customers.
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