DuPont Decomposition
Why does GNFC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.9% = 10.4% × 0.68 × 1.25
Latest: FY2026
Profitability
Net Margin
10.4%
19.8% →10.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.80x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.34x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 12.6 pp over 5 years. Driven by net margin declining (19.8% → 10.4%), asset turnover declining (0.80x → 0.68x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.8% | 0.80 | 1.34 | 21.4% |
| FY2023 | ₹0Cr | ₹0Cr | 14.4% | 0.87 | 1.28 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 6.3% | 0.74 | 1.28 | 6.0% |
| FY2025 | ₹0Cr | ₹0Cr | 7.6% | 0.72 | 1.28 | 7.0% |
| FY2026 | ₹0Cr | ₹0Cr | 10.4% | 0.68 | 1.25 | 8.9% |
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.