DuPont Decomposition
Why does KHAICHEM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.2% = 6.5% × 1.47 × 2.34
Latest: FY2026
Profitability
Net Margin
6.5%
9.7% →6.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.47x
1.44x →1.47x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.34x
2.26x →2.34x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.3 pp over 5 years. Driven by net margin declining (9.7% → 6.5%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 9.7% | 1.44 | 2.26 | 31.5% |
| FY2023 | ₹0Cr | ₹0Cr | 4.8% | 1.25 | 2.41 | 14.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -13.2% | 0.86 | 2.83 | -32.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.2% | 1.16 | 2.78 | 0.6% |
| FY2026 | ₹0Cr | ₹0Cr | 6.5% | 1.47 | 2.34 | 22.2% |
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.