DuPont Decomposition
Why does JSWSTEEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.3% = 12.3% × 0.68 × 2.70
Latest: FY2026
Profitability
Net Margin
12.3%
14.4% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
0.73x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.70x
2.92x →2.70x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.4 pp over 5 years. Driven by net margin declining (14.4% → 12.3%), leverage falling (2.92x → 2.70x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.4% | 0.73 | 2.92 | 30.7% |
| FY2023 | ₹0Cr | ₹0Cr | 2.5% | 0.78 | 3.21 | 6.3% |
| FY2024 | ₹0Cr | ₹0Cr | 5.1% | 0.76 | 2.94 | 11.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 0.69 | 3.03 | 4.4% |
| FY2026 | ₹0Cr | ₹0Cr | 12.3% | 0.68 | 2.70 | 22.3% |
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.