DuPont Decomposition
Why does KANANIIND earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.2% = 0.5% × 1.81 × 1.43
Latest: FY2025
Profitability
Net Margin
0.5%
0.6% →0.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.81x
2.06x →1.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.43x
2.40x →1.43x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.9 pp over 4 years. Driven by asset turnover declining (2.06x → 1.81x), leverage falling (2.40x → 1.43x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.6% | 2.06 | 2.40 | 3.1% |
| FY2023 | ₹0Cr | ₹0Cr | 0.8% | 2.07 | 2.08 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 0.3% | 2.35 | 1.50 | 1.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.5% | 1.81 | 1.43 | 1.2% |
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.