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Shankara Building ProductsBOM:540425 +0.29%44 WACC % is 9.64% as of Jul. 16, 2026, which is 27% below its 10-year median of 13.20. GuruFocus rates BOM:540425 with a GF Score™ of 44/100 and a GF Value™ of ₹50.14 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 1,139 Retail - Cyclical companies, Shankara Building Products ranks worse than 68.83% on this metric.
As of today (2026-07-16), Shankara Building Products's weighted average cost of capital is 9.64%%. Shankara Building Products's ROIC % is 8.77% (calculated using TTM income statement data).
Shankara Building Products 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.
Shankara Building Products (BOM:540425) 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, Shankara Building Products's weighted average cost of capital is 9.64%%. Shankara Building Products's ROIC % is 8.77% (calculated using TTM income statement data).
Shankara Building Products 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 quarterly 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 TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
* 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 Home Improvement Retail subindustry, Shankara Building Products'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.
Shankara Building Products WACC % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Shankara Building Products's WACC % distribution charts can be found below:
* The bar in red indicates where Shankara Building Products'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, Shankara Building Products's market capitalization (E) is ₹3317.308 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 quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Shankara Building Products's latest one-year quarterly average Book Value of Debt (D) is ₹1008.7667 Mil.
a) weight of equity = E / (E + D) = 3317.308 / (3317.308 + 1008.7667) = 0.7668
b) weight of debt = D / (E + D) = 1008.7667 / (3317.308 + 1008.7667) = 0.2332
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. Shankara Building Products's beta is 0.0934.
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% + 0.0934 * 6% = 7.5804%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Shankara Building Products's interest expense (positive number) was ₹228.5 Mil. Its total Book Value of Debt (D) is ₹1008.7667 Mil.
Cost of Debt = 228.5 / 1008.7667 = 22.6514%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM 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 TTM Tax Rate = 136.7 / 494.9 = 27.62%.
* 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.
Shankara Building Products (BOM:540425) has a WACC % of 9.64% as of Jul. 16, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Shankara Building Products and its competitors. This is 27% below median its historical median of 13.20. Over the past decade, Shankara Building Products' WACC % has ranged from 9.54 to 14.78. According to the industry distribution chart, Shankara Building Products ranks #784 out of 1139 companies in the Retail - Cyclical industry, placing it in the top 68.8%.
Is Shankara Building Products' WACC % too high?
Shankara Building Products' current WACC % of 9.64% is 27% below median its 10-year median of 13.20. Over the past 10 years, this metric has ranged from a low of 9.54 to a high of 14.78. The Retail - Cyclical industry median WACC % is 7.55. Shankara Building Products' value of 9.64% is 27.7% above this industry median. Based on the distribution chart, Shankara Building Products ranks #784 out of 1139 companies in the Retail - Cyclical industry, which is below the industry midpoint. Overall, Shankara Building Products has a GF Score™ of 44/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Shankara Building Products' WACC % compare to HD and LOW?
According to the Retail - Cyclical industry distribution chart, Shankara Building Products ranks #784 out of 1139 companies for WACC %. This places Shankara Building Products in the lower half of its industry. The industry median WACC % is 7.55. Shankara Building Products' value of 9.64% is 27.7% above this benchmark. Historically, Shankara Building Products' own WACC % has ranged from 9.54 to 14.78 over the past decade. While the company's 10-year median is 13.20 vs. the industry median of 7.55, Shankara Building Products has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Retail - Cyclical company?
The median WACC % among Retail - Cyclical companies is 7.55, based on 1,139 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. Shankara Building Products's current WACC % of 9.64% is 27.7% 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 Shankara Building Products and its competitors. For the Retail - Cyclical industry, the median WACC % is 7.55 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shankara Building Products's current WACC % is 9.64%, which is 27% below median its own 10-year median of 13.20. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shankara Building Products stock overvalued right now?
Based on GuruFocus' analysis, Shankara Building Products (BOM:540425) is currently considered Significantly Overvalued. The stock's GF Value™ is ₹50.14, compared to a current price of ₹136.80 — trading 172.8% above its estimated fair value. The current WACC % is 9.64%, which is 27% below median its 10-year median of 13.20 and 27.7% above the Retail - Cyclical industry median of 7.55. Shankara Building Products' overall GF Score™ is 44/100 with 6 warning signs to review. 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 Shankara Building Products (BOM:540425), the current WACC % is 9.64% as of Jul. 16, 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.
Is Shankara Building Products (BOM:540425) Overvalued in 2026?
Based on GuruFocus' analysis, Shankara Building Products stock appears to be overvalued.
The current stock price of ₹136.80 is trading 172.8% above its estimated GF Value™ of ₹50.14.
GuruFocus considers Shankara Building Products to be Significantly Overvalued.
Key valuation signals for BOM:540425:
WACC %: 9.64% (27% below median its 10-year median of 13.20)
GF Value™: ₹50.14 vs. price of ₹136.80 (172.8% above fair value)
Industry Position: 27.7% above the Retail - Cyclical median (#784 of 1139)
No single metric tells the full story. See the BOM:540425 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shankara Building Products Ltd is an organised retailer of home improvement and building products in India. The company's operating segments include Retail, Channel and Enterprise. It generates maximum revenue from the Retail segment. The Retail segment offers construction materials, plumbing and sanitaryware, flooring, electrical items, and interior-exterior finishing. Its In-house brands include Taurus; Loha; Prince; Century Roof; Ganga and Ganga Gold and Prince Scaffolding.
44GF Score
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