DuPont Decomposition
Why does KIMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.9% = 12.8% × 0.52 × 2.37
Latest: FY2025
Profitability
Net Margin
12.8%
17.1% →12.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.20x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.37x
1.76x →2.37x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.0 pp over 3 years. Driven by net margin declining (17.1% → 12.8%), asset turnover improving (0.20x → 0.52x), leverage rising (1.76x → 2.37x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 17.1% | 0.20 | 1.76 | 5.9% |
| FY2024 | ₹0Cr | ₹0Cr | 11.3% | 0.16 | 2.11 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 12.8% | 0.52 | 2.37 | 15.9% |
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.