DuPont Decomposition
Why does GVPIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
64.1% = 19.4% × 0.52 × 6.36
Latest: FY2025
Profitability
Net Margin
19.4%
-24.5% →19.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.63x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.36x
12.32x →6.36x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 253.6 pp over 3 years. Driven by net margin improving (-24.5% → 19.4%), asset turnover declining (0.63x → 0.52x), leverage falling (12.32x → 6.36x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -24.5% | 0.63 | 12.32 | -189.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -10.6% | 0.63 | 37.51 | -249.0% |
| FY2025 | ₹0Cr | ₹0Cr | 19.4% | 0.52 | 6.36 | 64.1% |
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.