DuPont Decomposition
Why does GPIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.4% = 15.1% × 0.87 × 1.25
Latest: FY2025
Profitability
Net Margin
15.1%
27.4% →15.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
1.09x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.42x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 26.2 pp over 4 years. Driven by net margin declining (27.4% → 15.1%), asset turnover declining (1.09x → 0.87x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 27.4% | 1.09 | 1.42 | 42.6% |
| FY2023 | ₹0Cr | ₹0Cr | 12.9% | 0.26 | 1.32 | 4.3% |
| FY2024 | ₹0Cr | ₹0Cr | 14.3% | 0.28 | 1.23 | 4.9% |
| FY2025 | ₹0Cr | ₹0Cr | 15.1% | 0.87 | 1.25 | 16.4% |
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.