DuPont Decomposition
Why does KHADIM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.0% = 1.2% × 0.54 × 3.03
Latest: FY2025
Profitability
Net Margin
1.2%
1.1% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.54x
0.89x →0.54x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.03x
3.14x →3.03x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.1 pp over 4 years. Driven by asset turnover declining (0.89x → 0.54x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.1% | 0.89 | 3.14 | 3.1% |
| FY2023 | ₹0Cr | ₹0Cr | 2.7% | 0.88 | 3.26 | 7.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 0.58 | 3.05 | 2.6% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 0.54 | 3.03 | 2.0% |
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.