DuPont Decomposition
Why does KEC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.8% = 2.6% × 0.93 × 4.08
Latest: FY2026
Profitability
Net Margin
2.6%
2.5% →2.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.93x
0.83x →0.93x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.08x
4.51x →4.08x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~10%. Driven by asset turnover improving (0.83x → 0.93x), leverage falling (4.51x → 4.08x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.5% | 0.83 | 4.51 | 9.2% |
| FY2023 | ₹0Cr | ₹0Cr | 1.0% | 0.98 | 4.58 | 4.7% |
| FY2024 | ₹0Cr | ₹0Cr | 1.8% | 1.03 | 4.65 | 8.5% |
| FY2025 | ₹0Cr | ₹0Cr | 2.6% | 0.98 | 4.15 | 10.7% |
| FY2026 | ₹0Cr | ₹0Cr | 2.6% | 0.93 | 4.08 | 9.8% |
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.