DuPont Decomposition
Why does GODFRYPHLP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.4% = 19.2% × 0.80 × 1.33
Latest: FY2025
Profitability
Net Margin
19.2%
15.1% →19.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.20x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.40x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 16.3 pp over 3 years. Driven by net margin improving (15.1% → 19.2%), asset turnover improving (0.20x → 0.80x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.1% | 0.20 | 1.40 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 18.0% | 0.20 | 1.38 | 5.1% |
| FY2025 | ₹0Cr | ₹0Cr | 19.2% | 0.80 | 1.33 | 20.4% |
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.