DuPont Decomposition
Why does KPEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
34.7% = 12.1% × 0.56 × 5.14
Latest: FY2026
Profitability
Net Margin
12.1%
7.3% →12.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.56x
0.73x →0.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.14x
3.92x →5.14x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.7 pp over 5 years. Driven by net margin improving (7.3% → 12.1%), asset turnover declining (0.73x → 0.56x), leverage rising (3.92x → 5.14x). 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 | 7.3% | 0.73 | 3.92 | 20.9% |
| FY2023 | ₹0Cr | ₹0Cr | 10.0% | 1.27 | 2.69 | 34.2% |
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 0.76 | 3.37 | 31.4% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 0.80 | 3.73 | 36.8% |
| FY2026 | ₹0Cr | ₹0Cr | 12.1% | 0.56 | 5.14 | 34.7% |
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.