DuPont Decomposition
Why does JSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.1% = 7.4% × 1.06 × 2.06
Latest: FY2026
Profitability
Net Margin
7.4%
9.5% →7.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.06x
1.43x →1.06x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
2.30x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.2 pp over 5 years. Driven by net margin declining (9.5% → 7.4%), asset turnover declining (1.43x → 1.06x), leverage falling (2.30x → 2.06x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.5% | 1.43 | 2.30 | 31.3% |
| FY2023 | ₹0Cr | ₹0Cr | 5.9% | 1.31 | 2.27 | 17.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.1% | 1.25 | 2.15 | 18.9% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 1.09 | 2.17 | 15.0% |
| FY2026 | ₹0Cr | ₹0Cr | 7.4% | 1.06 | 2.06 | 16.1% |
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.