DuPont Decomposition
Why does GPPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.0% = 43.4% × 0.31 × 1.26
Latest: FY2025
Profitability
Net Margin
43.4%
41.5% →43.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.08x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
1.24x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.8 pp over 3 years. Driven by net margin improving (41.5% → 43.4%), asset turnover improving (0.08x → 0.31x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 41.5% | 0.08 | 1.24 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 26.2% | 0.09 | 1.27 | 2.9% |
| FY2025 | ₹0Cr | ₹0Cr | 43.4% | 0.31 | 1.26 | 17.0% |
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.