DuPont Decomposition
Why does JKIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 6.9% × 1.00 × 1.88
Latest: FY2025
Profitability
Net Margin
6.9%
6.5% →6.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.26x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.88x
1.86x →1.88x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.8 pp over 3 years. Driven by asset turnover improving (0.26x → 1.00x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.5% | 0.26 | 1.86 | 3.2% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.30 | 1.78 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 6.9% | 1.00 | 1.88 | 13.0% |
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.