DuPont Decomposition
Why does GOPAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.7% = 1.3% × 2.72 × 1.33
Latest: FY2025
Profitability
Net Margin
1.3%
3.1% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.72x
3.38x →2.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
2.25x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 18.7 pp over 4 years. Driven by net margin declining (3.1% → 1.3%), asset turnover declining (3.38x → 2.72x), leverage falling (2.25x → 1.33x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.1% | 3.38 | 2.25 | 23.4% |
| FY2023 | ₹0Cr | ₹0Cr | 8.1% | 3.02 | 1.59 | 38.6% |
| FY2024 | ₹0Cr | ₹0Cr | 7.1% | 2.60 | 1.38 | 25.5% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 2.72 | 1.33 | 4.7% |
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.