DuPont Decomposition
Why does KOLTEPATIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.7% = 6.2% × 0.32 × 6.34
Latest: FY2025
Profitability
Net Margin
6.2%
15.2% →6.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.32x
0.19x →0.32x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.34x
4.03x →6.34x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.2 pp over 3 years. Driven by net margin declining (15.2% → 6.2%), asset turnover improving (0.19x → 0.32x), leverage rising (4.03x → 6.34x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.2% | 0.19 | 4.03 | 11.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.0% | 0.11 | 6.74 | -3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 6.2% | 0.32 | 6.34 | 12.7% |
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.