DuPont Decomposition
Why does GSFC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.5% = 6.2% × 0.76 × 1.17
Latest: FY2026
Profitability
Net Margin
6.2%
9.9% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.76x
0.64x →0.76x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.17x
1.20x →1.17x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.1 pp over 5 years. Driven by net margin declining (9.9% → 6.2%), asset turnover improving (0.64x → 0.76x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.9% | 0.64 | 1.20 | 7.6% |
| FY2023 | ₹0Cr | ₹0Cr | 22.8% | 0.40 | 1.16 | 10.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 0.37 | 1.18 | 4.4% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 0.66 | 1.18 | 4.9% |
| FY2026 | ₹0Cr | ₹0Cr | 6.2% | 0.76 | 1.17 | 5.5% |
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.