DuPont Decomposition
Why does KMEW earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.8% = 30.8% × 0.31 × 1.44
Latest: FY2026
Profitability
Net Margin
30.8%
33.3% →30.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.65x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.44x
1.98x →1.44x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 29.2 pp over 5 years. Driven by net margin declining (33.3% → 30.8%), asset turnover declining (0.65x → 0.31x), leverage falling (1.98x → 1.44x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 33.3% | 0.65 | 1.98 | 43.0% |
| FY2023 | ₹0Cr | ₹0Cr | 23.3% | 0.96 | 1.56 | 35.1% |
| FY2024 | ₹0Cr | ₹0Cr | 18.8% | 0.63 | 1.55 | 18.3% |
| FY2025 | ₹0Cr | ₹0Cr | 24.8% | 0.50 | 1.83 | 22.9% |
| FY2026 | ₹0Cr | ₹0Cr | 30.8% | 0.31 | 1.44 | 13.8% |
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.