DuPont Decomposition
Why does VIDYAWIRES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.0% = 3.1% × 3.04 × 1.26
Latest: FY2026
Profitability
Net Margin
3.1%
2.2% →3.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.04x
4.33x →3.04x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.26x
2.69x →1.26x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.2 pp over 5 years. Driven by asset turnover declining (4.33x → 3.04x), leverage falling (2.69x → 1.26x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.2% | 4.33 | 2.69 | 25.2% |
| FY2023 | ₹0Cr | ₹0Cr | 2.1% | 4.82 | 2.09 | 21.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.2% | 4.76 | 1.97 | 20.5% |
| FY2025 | ₹0Cr | ₹0Cr | 2.7% | 4.47 | 1.99 | 24.4% |
| FY2026 | ₹0Cr | ₹0Cr | 3.1% | 3.04 | 1.26 | 12.0% |
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.