DuPont Decomposition
Why does GANECOS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.0% = 7.3% × 0.73 × 1.68
Latest: FY2025
Profitability
Net Margin
7.3%
5.1% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.23x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.68x
2.07x →1.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.6 pp over 3 years. Driven by net margin improving (5.1% → 7.2%), asset turnover improving (0.23x → 0.73x), leverage falling (2.07x → 1.68x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.1% | 0.23 | 2.07 | 2.4% |
| FY2024 | ₹0Cr | ₹0Cr | 7.1% | 0.19 | 1.54 | 2.0% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 0.73 | 1.68 | 9.0% |
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.