DuPont Decomposition
Why does GSPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.5% = 6.4% × 0.83 × 1.79
Latest: FY2025
Profitability
Net Margin
6.4%
9.1% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.17x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.79x
1.93x →1.79x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 11.2 pp over 4 years. Driven by net margin declining (9.1% → 6.4%), asset turnover declining (1.17x → 0.83x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.1% | 1.17 | 1.93 | 20.7% |
| FY2023 | ₹0Cr | ₹0Cr | 9.1% | 1.04 | 1.83 | 17.4% |
| FY2024 | ₹0Cr | ₹0Cr | 9.6% | 0.90 | 1.76 | 15.3% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 0.83 | 1.79 | 9.5% |
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.