DuPont Decomposition
Why does KPIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 2.6% × 0.86 × 3.95
Latest: FY2025
Profitability
Net Margin
2.6%
2.9% →2.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.86x
0.25x →0.86x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.95x
4.15x →3.95x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.1 pp over 3 years. Driven by asset turnover improving (0.25x → 0.86x), leverage falling (4.15x → 3.95x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.9% | 0.25 | 4.15 | 3.0% |
| FY2024 | ₹0Cr | ₹0Cr | 2.8% | 0.27 | 4.29 | 3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.6% | 0.86 | 3.95 | 9.1% |
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.