DuPont Decomposition
Why does GODREJCP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.7% = 12.3% × 0.71 × 1.69
Latest: FY2026
Profitability
Net Margin
12.3%
14.7% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.71x
0.75x →0.71x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.69x
1.40x →1.69x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~15%. Driven by net margin declining (14.7% → 12.3%), leverage rising (1.40x → 1.69x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.7% | 0.75 | 1.40 | 15.4% |
| FY2023 | ₹0Cr | ₹0Cr | 12.9% | 0.75 | 1.27 | 12.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -4.0% | 0.76 | 1.47 | -4.5% |
| FY2025 | ₹0Cr | ₹0Cr | 13.3% | 0.71 | 1.64 | 15.4% |
| FY2026 | ₹0Cr | ₹0Cr | 12.3% | 0.71 | 1.69 | 14.7% |
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.