DuPont Decomposition
Why does VBL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.5% = 14.6% × 0.81 × 1.31
Latest: FY2026
Profitability
Net Margin
14.6%
11.6% →14.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.81x
1.11x →0.81x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.31x
2.28x →1.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.8 pp over 4 years. Driven by net margin improving (11.6% → 14.6%), asset turnover declining (1.11x → 0.81x), leverage falling (2.28x → 1.31x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.6% | 1.11 | 2.28 | 29.4% |
| FY2024 | ₹0Cr | ₹0Cr | 13.2% | 1.03 | 2.19 | 29.6% |
| FY2025 | ₹0Cr | ₹0Cr | 13.3% | 0.84 | 1.39 | 15.6% |
| FY2026 | ₹0Cr | ₹0Cr | 14.6% | 0.81 | 1.31 | 15.5% |
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.