DuPont Decomposition
Why does GANDHAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.2% = 2.1% × 1.99 × 1.52
Latest: FY2025
Profitability
Net Margin
2.1%
5.0% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.99x
2.57x →1.99x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.52x
2.35x →1.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 23.8 pp over 4 years. Driven by net margin declining (5.0% → 2.1%), asset turnover declining (2.57x → 1.99x), leverage falling (2.35x → 1.52x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.0% | 2.57 | 2.35 | 30.0% |
| FY2023 | ₹0Cr | ₹0Cr | 4.7% | 2.50 | 2.10 | 24.5% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 2.12 | 1.65 | 14.1% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 1.99 | 1.52 | 6.2% |
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.