DuPont Decomposition
Why does KOTAKBANK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.6% = 24.7% × 0.08 × 5.54
Latest: FY2026
Profitability
Net Margin
24.7%
26.3% →24.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.08x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.54x
5.62x →5.54x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.8 pp over 5 years. Driven by net margin declining (26.3% → 24.7%). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 26.3% | 0.08 | 5.62 | 12.4% |
| FY2023 | ₹0Cr | ₹0Cr | 28.8% | 0.08 | 5.52 | 13.3% |
| FY2024 | ₹0Cr | ₹0Cr | 26.1% | 0.09 | 5.91 | 14.0% |
| FY2025 | ₹0Cr | ₹0Cr | 29.6% | 0.08 | 5.59 | 14.1% |
| FY2026 | ₹0Cr | ₹0Cr | 24.7% | 0.08 | 5.54 | 10.6% |
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.