DuPont Decomposition
Why does VARDHACRLC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.7% = 8.6% × 0.93 × 1.35
Latest: FY2026
Profitability
Net Margin
8.6%
4.8% →8.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.93x
1.00x →0.93x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.35x
1.42x →1.35x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.9 pp over 5 years. Driven by net margin improving (4.8% → 8.6%).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.8% | 1.00 | 1.42 | 6.9% |
| FY2023 | ₹0Cr | ₹0Cr | 7.7% | 1.25 | 1.39 | 13.4% |
| FY2024 | ₹0Cr | ₹0Cr | 5.9% | 0.91 | 1.35 | 7.2% |
| FY2025 | ₹0Cr | ₹0Cr | 4.2% | 0.81 | 1.46 | 5.0% |
| FY2026 | ₹0Cr | ₹0Cr | 8.6% | 0.93 | 1.35 | 10.7% |
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.