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
15.0% = 6.4% × 1.08 × 2.16
Latest: FY2025
Profitability
Net Margin
6.4%
7.3% →6.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.08x
0.36x →1.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.16x
2.27x →2.16x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.0 pp over 3 years. Driven by asset turnover improving (0.36x → 1.08x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.3% | 0.36 | 2.27 | 6.0% |
| FY2024 | ₹0Cr | ₹0Cr | 5.3% | 0.31 | 2.15 | 3.5% |
| FY2025 | ₹0Cr | ₹0Cr | 6.4% | 1.08 | 2.16 | 15.0% |
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.