DuPont Decomposition
Why does KOTHARIPET earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
21.5% = 11.5% × 1.52 × 1.24
Latest: FY2025
Profitability
Net Margin
11.5%
9.6% →11.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.52x
0.51x →1.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.24x
1.41x →1.24x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 14.6 pp over 3 years. Driven by net margin improving (9.6% → 11.5%), asset turnover improving (0.51x → 1.52x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.6% | 0.51 | 1.41 | 6.9% |
| FY2024 | ₹0Cr | ₹0Cr | 9.0% | 0.53 | 1.29 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 11.5% | 1.52 | 1.24 | 21.5% |
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.