DuPont Decomposition
Why does KCP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.6% = 5.8% × 0.81 × 2.02
Latest: FY2025
Profitability
Net Margin
5.8%
8.9% →5.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
0.88x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.02x
2.02x →2.02x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.4 pp over 4 years. Driven by net margin declining (8.9% → 5.8%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.9% | 0.88 | 2.02 | 16.0% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 0.86 | 2.14 | 3.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.6% | 1.00 | 2.01 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 5.8% | 0.81 | 2.02 | 9.6% |
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.