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
10.7% = 6.2% × 0.50 × 3.45
Latest: FY2026
Profitability
Net Margin
6.2%
20.1% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.50x
0.87x →0.50x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.45x
1.37x →3.45x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.2 pp over 5 years. Driven by net margin declining (20.1% → 6.2%), asset turnover declining (0.87x → 0.50x), leverage rising (1.37x → 3.45x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 20.1% | 0.87 | 1.37 | 24.0% |
| FY2023 | ₹0Cr | ₹0Cr | 15.5% | 0.74 | 1.76 | 20.1% |
| FY2024 | ₹0Cr | ₹0Cr | 12.5% | 0.64 | 2.11 | 17.0% |
| FY2025 | ₹0Cr | ₹0Cr | 12.7% | 0.53 | 2.68 | 18.0% |
| FY2026 | ₹0Cr | ₹0Cr | 6.2% | 0.50 | 3.45 | 10.7% |
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.