DuPont Decomposition
Why does GIPCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.0% = 16.9% × 0.16 × 2.15
Latest: FY2025
Profitability
Net Margin
16.9%
14.0% →16.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.16x
0.30x →0.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.15x
1.42x →2.15x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~6%. Driven by net margin improving (14.0% → 16.9%), asset turnover declining (0.30x → 0.16x), leverage rising (1.42x → 2.15x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 14.0% | 0.30 | 1.42 | 6.0% |
| FY2024 | ₹0Cr | ₹0Cr | 14.8% | 0.26 | 1.58 | 6.0% |
| FY2025 | ₹0Cr | ₹0Cr | 16.9% | 0.16 | 2.15 | 6.0% |
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.