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
8.3% = 5.4% × 1.28 × 1.19
Latest: FY2025
Profitability
Net Margin
5.4%
4.9% →5.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.28x
0.48x →1.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.21x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.5 pp over 3 years. Driven by asset turnover improving (0.48x → 1.28x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.9% | 0.48 | 1.21 | 2.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 0.41 | 1.20 | 3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 5.4% | 1.28 | 1.19 | 8.3% |
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.