DuPont Decomposition
Why does VENUSPIPES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.5% = 10.1% × 0.91 × 1.90
Latest: FY2025
Profitability
Net Margin
10.1%
7.6% →10.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
0.35x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.90x
1.57x →1.90x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 13.3 pp over 3 years. Driven by net margin improving (7.6% → 10.1%), asset turnover improving (0.35x → 0.91x), leverage rising (1.57x → 1.90x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.6% | 0.35 | 1.57 | 4.2% |
| FY2024 | ₹0Cr | ₹0Cr | 11.2% | 0.30 | 1.87 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 10.1% | 0.91 | 1.90 | 17.5% |
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.