DuPont Decomposition
Why does KSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.6% = 13.1% × 0.72 × 1.44
Latest: FY2025
Profitability
Net Margin
13.1%
15.2% →13.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.72x
0.20x →0.72x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.44x
1.58x →1.44x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.9 pp over 2 years. Driven by net margin declining (15.2% → 13.1%), asset turnover improving (0.20x → 0.72x).
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 15.2% | 0.20 | 1.58 | 4.7% |
| FY2025 | ₹0Cr | ₹0Cr | 13.1% | 0.72 | 1.44 | 13.6% |
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.