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
31.9% = 62.6% × 0.40 × 1.28
Latest: FY2025
Profitability
Net Margin
62.6%
1.8% →62.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.40x
0.40x →0.40x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
4.89x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 28.3 pp over 2 years. Driven by net margin improving (1.8% → 62.6%), leverage falling (4.89x → 1.28x).
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 1.8% | 0.40 | 4.89 | 3.6% |
| FY2025 | ₹0Cr | ₹0Cr | 62.6% | 0.40 | 1.28 | 31.9% |
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.