DuPont Decomposition
Why does KAYNES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.3% = 10.8% × 0.59 × 1.63
Latest: FY2025
Profitability
Net Margin
10.8%
5.9% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.59x
1.13x →0.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.63x
3.06x →1.63x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.0 pp over 4 years. Driven by net margin improving (5.9% → 10.8%), asset turnover declining (1.13x → 0.59x), leverage falling (3.06x → 1.63x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.9% | 1.13 | 3.06 | 20.4% |
| FY2023 | ₹0Cr | ₹0Cr | 9.7% | 0.46 | 1.48 | 6.6% |
| FY2024 | ₹0Cr | ₹0Cr | 10.2% | 0.61 | 1.22 | 7.5% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.59 | 1.63 | 10.3% |
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.