DuPont Decomposition
Why does VETO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.3% = 7.4% × 0.90 × 1.24
Latest: FY2025
Profitability
Net Margin
7.4%
7.5% →7.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
0.86x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.24x
1.45x →1.24x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.1 pp over 4 years. Driven by leverage falling (1.45x → 1.24x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.5% | 0.86 | 1.45 | 9.4% |
| FY2023 | ₹0Cr | ₹0Cr | 7.0% | 0.90 | 1.37 | 8.7% |
| FY2024 | ₹0Cr | ₹0Cr | 6.0% | 0.98 | 1.24 | 7.3% |
| FY2025 | ₹0Cr | ₹0Cr | 7.4% | 0.90 | 1.24 | 8.3% |
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.