DuPont Decomposition
Why does JKLAKSHMI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.8% = 4.5% × 0.73 × 2.38
Latest: FY2025
Profitability
Net Margin
4.5%
8.6% →4.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.73x
0.91x →0.73x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.38x
2.37x →2.38x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.7 pp over 4 years. Driven by net margin declining (8.6% → 4.5%), asset turnover declining (0.91x → 0.73x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.6% | 0.91 | 2.37 | 18.5% |
| FY2023 | ₹0Cr | ₹0Cr | 5.6% | 0.99 | 2.33 | 12.8% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 0.90 | 2.31 | 14.8% |
| FY2025 | ₹0Cr | ₹0Cr | 4.5% | 0.73 | 2.38 | 7.8% |
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.