DuPont Decomposition
Why does VGUARD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.9% = 5.7% × 1.66 × 1.59
Latest: FY2025
Profitability
Net Margin
5.7%
4.6% →5.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.66x
0.39x →1.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.59x
1.81x →1.59x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.7 pp over 3 years. Driven by net margin improving (4.6% → 5.7%), asset turnover improving (0.39x → 1.66x), leverage falling (1.81x → 1.59x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.6% | 0.39 | 1.81 | 3.3% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.42 | 1.74 | 4.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.7% | 1.66 | 1.59 | 14.9% |
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.