DuPont Decomposition
Why does KERNEX earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
31.8% = 26.5% × 0.80 × 1.50
Latest: FY2025
Profitability
Net Margin
26.5%
-258.6% →26.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.09x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.61x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 67.5 pp over 4 years. Driven by net margin improving (-258.6% → 26.5%), asset turnover improving (0.09x → 0.80x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -258.6% | 0.09 | 1.61 | -35.7% |
| FY2023 | ₹0Cr | ₹-0Cr | -490.5% | 0.04 | 1.24 | -24.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -134.8% | 0.12 | 1.49 | -24.8% |
| FY2025 | ₹0Cr | ₹0Cr | 26.5% | 0.80 | 1.50 | 31.8% |
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.