DuPont Decomposition
Why does KRN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.3% = 12.7% × 0.64 × 1.62
Latest: FY2026
Profitability
Net Margin
12.7%
6.8% →12.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
1.68x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
3.63x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 28.2 pp over 5 years. Driven by net margin improving (6.8% → 12.7%), asset turnover declining (1.68x → 0.64x), leverage falling (3.63x → 1.62x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.8% | 1.68 | 3.63 | 41.5% |
| FY2023 | ₹0Cr | ₹0Cr | 13.1% | 1.66 | 2.50 | 54.2% |
| FY2024 | ₹0Cr | ₹0Cr | 12.8% | 1.20 | 1.98 | 30.2% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 0.72 | 1.19 | 10.6% |
| FY2026 | ₹0Cr | ₹0Cr | 12.7% | 0.64 | 1.62 | 13.3% |
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.