DuPont Decomposition
Why does JLHL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.3% = 15.4% × 0.66 × 1.40
Latest: FY2025
Profitability
Net Margin
15.4%
7.0% →15.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.81x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.40x
3.15x →1.40x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.5 pp over 4 years. Driven by net margin improving (7.0% → 15.4%), asset turnover declining (0.81x → 0.66x), leverage falling (3.15x → 1.40x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.0% | 0.81 | 3.15 | 17.7% |
| FY2023 | ₹0Cr | ₹0Cr | 8.2% | 0.91 | 2.71 | 20.0% |
| FY2024 | ₹0Cr | ₹0Cr | 16.5% | 0.83 | 1.10 | 15.1% |
| FY2025 | ₹0Cr | ₹0Cr | 15.4% | 0.66 | 1.40 | 14.3% |
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.