DuPont Decomposition
Why does KDDL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.7% = 5.8% × 0.78 × 1.48
Latest: FY2025
Profitability
Net Margin
5.8%
7.1% →5.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.78x
0.26x →0.78x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.48x
2.54x →1.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.0 pp over 3 years. Driven by net margin declining (7.1% → 5.8%), asset turnover improving (0.26x → 0.78x), leverage falling (2.54x → 1.48x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.1% | 0.26 | 2.54 | 4.7% |
| FY2024 | ₹0Cr | ₹0Cr | 10.0% | 0.21 | 2.24 | 4.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.8% | 0.78 | 1.48 | 6.7% |
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.