DuPont Decomposition
Why does GRASIM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.8% = 2.8% × 0.31 × 5.50
Latest: FY2026
Profitability
Net Margin
2.8%
8.0% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.33x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.50x
3.82x →5.50x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.2 pp over 5 years. Driven by net margin declining (8.0% → 2.8%), leverage rising (3.82x → 5.50x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.0% | 0.33 | 3.82 | 10.0% |
| FY2023 | ₹0Cr | ₹0Cr | 5.9% | 0.35 | 4.28 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 4.3% | 0.31 | 4.65 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.5% | 0.30 | 5.13 | 3.8% |
| FY2026 | ₹0Cr | ₹0Cr | 2.8% | 0.31 | 5.50 | 4.8% |
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.