DuPont Decomposition
Why does GHCLTEXTIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.9% = 4.9% × 0.68 × 1.18
Latest: FY2025
Profitability
Net Margin
4.9%
2.4% →4.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.65x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.18x
1.18x →1.18x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.1 pp over 2 years. Driven by net margin improving (2.4% → 4.9%).
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 2.4% | 0.65 | 1.18 | 1.8% |
| FY2025 | ₹0Cr | ₹0Cr | 4.9% | 0.68 | 1.18 | 3.9% |
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.