DuPont Decomposition
Why does KEI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.0% = 7.3% × 1.33 × 1.25
Latest: FY2025
Profitability
Net Margin
7.3%
7.0% →7.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.33x
1.82x →1.33x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.25x
1.46x →1.25x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.4 pp over 3 years. Driven by asset turnover declining (1.82x → 1.33x), leverage falling (1.46x → 1.25x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.0% | 1.82 | 1.46 | 18.4% |
| FY2024 | ₹0Cr | ₹0Cr | 7.2% | 1.73 | 1.48 | 18.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.3% | 1.33 | 1.25 | 12.0% |
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.