DuPont Decomposition
Why does GARUDA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.0% = 22.1% × 0.55 × 1.23
Latest: FY2025
Profitability
Net Margin
22.1%
24.4% →22.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.69x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.23x
2.66x →1.23x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 30.0 pp over 4 years. Driven by net margin declining (24.4% → 22.1%), asset turnover declining (0.69x → 0.55x), leverage falling (2.66x → 1.23x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 24.4% | 0.69 | 2.66 | 44.9% |
| FY2023 | ₹0Cr | ₹0Cr | 25.6% | 0.91 | 2.13 | 49.4% |
| FY2024 | ₹0Cr | ₹0Cr | 23.6% | 0.67 | 1.92 | 30.6% |
| FY2025 | ₹0Cr | ₹0Cr | 22.1% | 0.55 | 1.23 | 15.0% |
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.