DuPont Decomposition
Why does EKC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.1% = 6.7% × 0.91 × 1.34
Latest: FY2025
Profitability
Net Margin
6.7%
12.2% →6.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.22x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.37x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.5 pp over 3 years. Driven by net margin declining (12.2% → 6.7%), asset turnover improving (0.22x → 0.91x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.2% | 0.22 | 1.37 | 3.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.23 | 1.28 | 1.2% |
| FY2025 | ₹0Cr | ₹0Cr | 6.7% | 0.91 | 1.34 | 8.1% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.