DuPont Decomposition
Why does KRSNAA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.8% = 10.8% × 0.56 × 1.45
Latest: FY2025
Profitability
Net Margin
10.8%
12.8% →10.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.56x
0.54x →0.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.45x
1.22x →1.45x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~9%. Driven by net margin declining (12.8% → 10.8%), leverage rising (1.22x → 1.45x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 12.8% | 0.54 | 1.22 | 8.4% |
| FY2024 | ₹0Cr | ₹0Cr | 9.2% | 0.53 | 1.44 | 7.0% |
| FY2025 | ₹0Cr | ₹0Cr | 10.8% | 0.56 | 1.45 | 8.8% |
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.