DuPont Decomposition
Why does VHLTD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.9% = 12.8% × 0.26 × 2.09
Latest: FY2026
Profitability
Net Margin
12.8%
1.8% →12.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.26x
0.40x →0.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.09x
4.91x →2.09x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 3.3 pp over 3 years. Driven by net margin improving (1.8% → 12.8%), asset turnover declining (0.40x → 0.26x), leverage falling (4.91x → 2.09x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 1.8% | 0.40 | 4.91 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 56.8% | 0.44 | 1.28 | 31.9% |
| FY2026 | ₹0Cr | ₹0Cr | 12.8% | 0.26 | 2.09 | 6.9% |
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.