DuPont Decomposition
Why does KNRCON earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
22.1% = 21.1% × 0.67 × 1.57
Latest: FY2025
Profitability
Net Margin
21.1%
10.8% →21.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
0.94x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.57x
1.56x →1.57x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.2 pp over 3 years. Driven by net margin improving (10.8% → 21.1%), asset turnover declining (0.94x → 0.67x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 10.8% | 0.94 | 1.56 | 15.8% |
| FY2024 | ₹0Cr | ₹0Cr | 17.0% | 0.76 | 1.63 | 21.2% |
| FY2025 | ₹0Cr | ₹0Cr | 21.1% | 0.67 | 1.57 | 22.1% |
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.