DuPont Decomposition
Why does GODIGIT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.2% = 4.4% × 0.45 × 4.72
Latest: FY2025
Profitability
Net Margin
4.4%
-7.6% →4.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.35x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.72x
3.76x →4.72x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 19.4 pp over 4 years. Driven by net margin improving (-7.6% → 4.4%), asset turnover improving (0.35x → 0.45x), leverage rising (3.76x → 4.72x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -7.6% | 0.35 | 3.76 | -10.1% |
| FY2023 | ₹0Cr | ₹0Cr | 0.6% | 0.42 | 4.30 | 1.1% |
| FY2024 | ₹0Cr | ₹0Cr | 2.1% | 0.49 | 6.89 | 7.1% |
| FY2025 | ₹0Cr | ₹0Cr | 4.4% | 0.45 | 4.72 | 9.2% |
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.