DuPont Decomposition
Why does GLOBECIVIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.8% = 4.6% × 1.05 × 4.09
Latest: FY2024
Profitability
Net Margin
4.6%
1.8% →4.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.05x
1.24x →1.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.09x
4.00x →4.09x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.8 pp over 3 years. Driven by net margin improving (1.8% → 4.6%), asset turnover declining (1.24x → 1.05x). 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 |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.8% | 1.24 | 4.00 | 9.1% |
| FY2023 | ₹0Cr | ₹0Cr | 2.1% | 0.85 | 4.40 | 7.8% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 1.05 | 4.09 | 19.8% |
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.