DuPont Decomposition
Why does GMDCLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 24.1% × 0.37 × 1.21
Latest: FY2025
Profitability
Net Margin
24.1%
47.5% →24.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.37x
0.14x →0.37x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.21x
1.19x →1.21x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.9 pp over 3 years. Driven by net margin declining (47.5% → 24.1%), asset turnover improving (0.14x → 0.37x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 47.5% | 0.14 | 1.19 | 7.8% |
| FY2024 | ₹0Cr | ₹0Cr | 27.6% | 0.10 | 1.20 | 3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 24.1% | 0.37 | 1.21 | 10.7% |
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.