DuPont Decomposition
Why does KKCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.6% = 14.5% × 0.70 × 1.44
Latest: FY2025
Profitability
Net Margin
14.5%
15.3% →14.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
0.95x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.44x
1.49x →1.44x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.2 pp over 3 years. Driven by asset turnover declining (0.95x → 0.70x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.3% | 0.95 | 1.49 | 21.8% |
| FY2024 | ₹0Cr | ₹0Cr | 18.0% | 1.03 | 1.24 | 22.8% |
| FY2025 | ₹0Cr | ₹0Cr | 14.5% | 0.70 | 1.44 | 14.6% |
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.