DuPont Decomposition
Why does GSS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-0.4% = -1.1% × 0.23 × 1.54
Latest: FY2025
Profitability
Net Margin
-1.1%
26.0% →-1.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.23x
0.58x →0.23x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.54x
1.14x →1.54x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 17.5 pp over 4 years. Driven by net margin declining (26.0% → -1.1%), asset turnover declining (0.58x → 0.23x), leverage rising (1.14x → 1.54x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 26.0% | 0.58 | 1.14 | 17.1% |
| FY2023 | ₹0Cr | ₹0Cr | 13.0% | 0.49 | 1.13 | 7.2% |
| FY2024 | ₹0Cr | ₹0Cr | 4.4% | 0.32 | 1.53 | 2.1% |
| FY2025 | ₹0Cr | ₹-0Cr | -1.1% | 0.23 | 1.54 | -0.4% |
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.