DuPont Decomposition
Why does GRAVITA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.0% = 8.1% × 1.53 × 1.21
Latest: FY2025
Profitability
Net Margin
8.1%
8.5% →8.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.53x
0.62x →1.53x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.21x
2.05x →1.21x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.2 pp over 3 years. Driven by asset turnover improving (0.62x → 1.53x), leverage falling (2.05x → 1.21x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.5% | 0.62 | 2.05 | 10.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.5% | 0.69 | 2.28 | 10.3% |
| FY2025 | ₹0Cr | ₹0Cr | 8.1% | 1.53 | 1.21 | 15.0% |
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.