DuPont Decomposition
Why does KARURVYSYA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.3% = 35.1% × 0.05 × 10.01
Latest: FY2025
Profitability
Net Margin
35.1%
19.3% →35.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.05x
0.04x →0.05x
Revenue per ₹ of assets
Leverage
Equity Multiplier
10.01x
10.54x →10.01x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.4 pp over 3 years. Driven by net margin improving (19.3% → 35.1%), leverage falling (10.54x → 10.01x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 19.3% | 0.04 | 10.54 | 8.9% |
| FY2023 | ₹0Cr | ₹0Cr | 26.4% | 0.05 | 10.51 | 12.9% |
| FY2025 | ₹0Cr | ₹0Cr | 35.1% | 0.05 | 10.01 | 16.3% |
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.