DuPont Decomposition
Why does KUANTUM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.5% = 10.5% × 0.52 × 1.74
Latest: FY2025
Profitability
Net Margin
10.5%
18.9% →10.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.20x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.74x
1.75x →1.74x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.8 pp over 3 years. Driven by net margin declining (18.9% → 10.5%), asset turnover improving (0.20x → 0.52x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.9% | 0.20 | 1.75 | 6.7% |
| FY2024 | ₹0Cr | ₹0Cr | 11.3% | 0.16 | 1.68 | 3.0% |
| FY2025 | ₹0Cr | ₹0Cr | 10.5% | 0.52 | 1.74 | 9.5% |
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.