DuPont Decomposition
Why does GICHSGFIN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.3% = 14.5% × 0.09 × 5.36
Latest: FY2026
Profitability
Net Margin
14.5%
15.3% →14.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.09x
0.10x →0.09x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.36x
7.90x →5.36x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.1 pp over 5 years. Driven by leverage falling (7.90x → 5.36x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 15.3% | 0.10 | 7.90 | 11.5% |
| FY2023 | ₹0Cr | ₹0Cr | 19.6% | 0.10 | 6.43 | 12.6% |
| FY2024 | ₹0Cr | ₹0Cr | 14.7% | 0.10 | 5.73 | 8.3% |
| FY2025 | ₹0Cr | ₹0Cr | 15.2% | 0.10 | 5.48 | 8.2% |
| FY2026 | ₹0Cr | ₹0Cr | 14.5% | 0.09 | 5.36 | 7.3% |
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.