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
31.9% = 26.5% × 0.80 × 1.50
Latest: FY2025
Profitability
Net Margin
26.5%
-495.6% →26.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.04x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.50x
1.24x →1.50x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 56.3 pp over 3 years. Driven by net margin improving (-495.6% → 26.5%), asset turnover improving (0.04x → 0.80x), leverage rising (1.24x → 1.50x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0.2Cr | -495.6% | 0.04 | 1.24 | -24.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -136.3% | 0.12 | 1.49 | -25.1% |
| FY2025 | ₹0Cr | ₹0Cr | 26.5% | 0.80 | 1.50 | 31.9% |
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.