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
8.2% = 15.5% × 0.10 × 5.48
Latest: FY2025
Profitability
Net Margin
15.5%
18.6% →15.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.10x
0.03x →0.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.48x
6.43x →5.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.1 pp over 3 years. Driven by net margin declining (18.6% → 15.5%), leverage falling (6.43x → 5.48x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.6% | 0.03 | 6.43 | 3.1% |
| FY2024 | ₹0Cr | ₹0Cr | 20.6% | 0.02 | 5.73 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 15.5% | 0.10 | 5.48 | 8.2% |
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.