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
7.1% = 6.4% × 0.83 × 1.34
Latest: FY2025
Profitability
Net Margin
6.4%
9.1% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.04x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.34x
1.83x →1.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.2 pp over 3 years. Driven by net margin declining (9.1% → 6.4%), asset turnover declining (1.04x → 0.83x), leverage falling (1.83x → 1.34x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| 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 | 1.34 | 7.1% |
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.