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
37.0% = 12.3% × 0.80 × 3.75
Latest: FY2025
Profitability
Net Margin
12.3%
7.3% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.80x
0.73x →0.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.75x
3.16x →3.75x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.1 pp over 4 years. Driven by net margin improving (7.3% → 12.3%), leverage rising (3.16x → 3.75x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.3% | 0.73 | 3.16 | 16.9% |
| FY2023 | ₹0Cr | ₹0Cr | 10.0% | 1.27 | 2.71 | 34.5% |
| FY2024 | ₹0Cr | ₹0Cr | 12.3% | 0.76 | 3.39 | 31.6% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 0.80 | 3.75 | 37.0% |
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.