DuPont Decomposition
Why does GCSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.7% = 10.6% × 0.52 × 1.40
Latest: FY2026
Profitability
Net Margin
10.6%
86.5% →10.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.14x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
1.31x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.9 pp over 5 years. Driven by net margin declining (86.5% → 10.6%), asset turnover improving (0.14x → 0.52x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 86.5% | 0.14 | 1.31 | 15.6% |
| FY2023 | ₹0Cr | ₹0Cr | 169.6% | 0.26 | 1.26 | 55.5% |
| FY2024 | ₹0Cr | ₹0Cr | 76.6% | 0.20 | 1.62 | 25.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.5% | 0.96 | 1.40 | 0.7% |
| FY2026 | ₹0Cr | ₹0Cr | 10.6% | 0.52 | 1.40 | 7.7% |
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.