DuPont Decomposition
Why does GAEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.2% = 5.3% × 1.38 × 1.26
Latest: FY2026
Profitability
Net Margin
5.3%
10.3% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.38x
1.68x →1.38x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
1.30x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.2 pp over 5 years. Driven by net margin declining (10.3% → 5.3%), asset turnover declining (1.68x → 1.38x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.3% | 1.68 | 1.30 | 22.4% |
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 1.65 | 1.21 | 13.6% |
| FY2024 | ₹0Cr | ₹0Cr | 7.1% | 1.48 | 1.20 | 12.5% |
| FY2025 | ₹0Cr | ₹0Cr | 5.4% | 1.29 | 1.19 | 8.3% |
| FY2026 | ₹0Cr | ₹0Cr | 5.3% | 1.38 | 1.26 | 9.2% |
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.