DuPont Decomposition
Why does KAMATHOTEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.7% = 14.5% × 0.55 × 2.12
Latest: FY2025
Profitability
Net Margin
14.5%
112.1% →14.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.46x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.12x
3.95x →2.12x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 186.3 pp over 3 years. Driven by net margin declining (112.1% → 14.5%), leverage falling (3.95x → 2.12x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 112.1% | 0.46 | 3.95 | 203.1% |
| FY2024 | ₹0Cr | ₹0Cr | 15.6% | 0.47 | 2.99 | 21.8% |
| FY2025 | ₹0Cr | ₹0Cr | 14.5% | 0.55 | 2.12 | 16.7% |
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.