DuPont Decomposition
Why does KSCL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.7% = 23.4% × 0.45 × 1.76
Latest: FY2025
Profitability
Net Margin
23.4%
25.5% →23.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.45x
0.52x →0.45x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.76x
1.50x →1.76x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.3 pp over 3 years. Driven by net margin declining (25.5% → 23.4%), leverage rising (1.50x → 1.76x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 25.5% | 0.52 | 1.50 | 20.0% |
| FY2024 | ₹0Cr | ₹0Cr | 26.1% | 0.56 | 1.66 | 24.3% |
| FY2025 | ₹0Cr | ₹0Cr | 23.4% | 0.45 | 1.76 | 18.7% |
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.