DuPont Decomposition
Why does KOVAI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.2% = 16.2% × 0.72 × 1.66
Latest: FY2025
Profitability
Net Margin
16.2%
11.5% →16.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
0.67x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.66x
2.20x →1.66x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.1 pp over 4 years. Driven by net margin improving (11.5% → 16.2%), leverage falling (2.20x → 1.66x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 11.5% | 0.67 | 2.20 | 17.1% |
| FY2023 | ₹0Cr | ₹0Cr | 12.1% | 0.67 | 2.00 | 16.1% |
| FY2024 | ₹0Cr | ₹0Cr | 15.8% | 0.79 | 1.62 | 20.2% |
| FY2025 | ₹0Cr | ₹0Cr | 16.2% | 0.72 | 1.66 | 19.2% |
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.