DuPont Decomposition
Why does KTKBANK earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.5% = 27.8% × 0.04 × 10.01
Latest: FY2025
Profitability
Net Margin
27.8%
28.2% →27.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.04x
0.04x →0.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
10.01x
12.06x →10.01x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.8 pp over 2 years. Driven by leverage falling (12.06x → 10.01x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 28.2% | 0.04 | 12.06 | 14.4% |
| FY2025 | ₹0Cr | ₹0Cr | 27.8% | 0.04 | 10.01 | 10.5% |
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.