DuPont Decomposition
Why does GREENLAM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.2% = 2.8% × 0.86 × 2.58
Latest: FY2025
Profitability
Net Margin
2.8%
8.6% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.86x
0.26x →0.86x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.58x
2.12x →2.58x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.4 pp over 3 years. Driven by net margin declining (8.6% → 2.8%), asset turnover improving (0.26x → 0.86x), leverage rising (2.12x → 2.58x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.6% | 0.26 | 2.12 | 4.8% |
| FY2024 | ₹0Cr | ₹0Cr | 6.5% | 0.23 | 2.54 | 3.8% |
| FY2025 | ₹0Cr | ₹0Cr | 2.8% | 0.86 | 2.58 | 6.2% |
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.