DuPont Decomposition
Why does GRSE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
25.4% = 10.4% × 0.49 × 4.98
Latest: FY2025
Profitability
Net Margin
10.4%
10.9% →10.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.49x
0.23x →0.49x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.98x
6.07x →4.98x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.3 pp over 4 years. Driven by asset turnover improving (0.23x → 0.49x), leverage falling (6.07x → 4.98x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 10.9% | 0.23 | 6.07 | 15.1% |
| FY2023 | ₹0Cr | ₹0Cr | 8.9% | 0.24 | 7.62 | 16.1% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 0.35 | 6.13 | 21.4% |
| FY2025 | ₹0Cr | ₹0Cr | 10.4% | 0.49 | 4.98 | 25.4% |
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.