DuPont Decomposition
Why does GLAXO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
45.7% = 27.1% × 0.88 × 1.91
Latest: FY2026
Profitability
Net Margin
27.1%
51.9% →27.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.88x
0.70x →0.88x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.91x
1.74x →1.91x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.0 pp over 5 years. Driven by net margin declining (51.9% → 27.1%), asset turnover improving (0.70x → 0.88x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 51.9% | 0.70 | 1.74 | 63.6% |
| FY2023 | ₹0Cr | ₹0Cr | 18.9% | 0.97 | 1.91 | 35.1% |
| FY2024 | ₹0Cr | ₹0Cr | 17.1% | 0.97 | 2.00 | 33.2% |
| FY2025 | ₹0Cr | ₹0Cr | 24.7% | 0.91 | 2.11 | 47.5% |
| FY2026 | ₹0Cr | ₹0Cr | 27.1% | 0.88 | 1.91 | 45.7% |
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.