DuPont Decomposition
Why does GKENERGY earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
63.7% = 12.2% × 1.88 × 2.79
Latest: FY2025
Profitability
Net Margin
12.2%
2.2% →12.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.88x
1.01x →1.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.79x
7.66x →2.79x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 46.6 pp over 4 years. Driven by net margin improving (2.2% → 12.2%), asset turnover improving (1.01x → 1.88x), leverage falling (7.66x → 2.79x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.2% | 1.01 | 7.66 | 17.1% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 2.00 | 7.19 | 50.7% |
| FY2024 | ₹0Cr | ₹0Cr | 8.8% | 1.92 | 3.83 | 64.5% |
| FY2025 | ₹0Cr | ₹0Cr | 12.2% | 1.88 | 2.79 | 63.7% |
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.