DuPont Decomposition
Why does KRONOX earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
28.3% = 25.4% × 1.01 × 1.10
Latest: FY2025
Profitability
Net Margin
25.4%
16.6% →25.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.45x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.41x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.5 pp over 4 years. Driven by net margin improving (16.6% → 25.4%), asset turnover declining (1.45x → 1.01x), leverage falling (1.41x → 1.10x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.6% | 1.45 | 1.41 | 33.8% |
| FY2023 | ₹0Cr | ₹0Cr | 17.4% | 1.77 | 1.21 | 37.2% |
| FY2024 | ₹0Cr | ₹0Cr | 26.5% | 0.30 | 1.12 | 8.9% |
| FY2025 | ₹0Cr | ₹0Cr | 25.4% | 1.01 | 1.10 | 28.3% |
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.