DuPont Decomposition
Why does VINDHYATEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.0% = 5.0% × 0.52 × 1.89
Latest: FY2025
Profitability
Net Margin
5.0%
7.4% →5.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.52x
0.23x →0.52x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.89x
1.78x →1.89x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.0 pp over 3 years. Driven by net margin declining (7.4% → 5.0%), asset turnover improving (0.23x → 0.52x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.4% | 0.23 | 1.78 | 3.0% |
| FY2024 | ₹0Cr | ₹0Cr | 8.4% | 0.19 | 1.71 | 2.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.0% | 0.52 | 1.89 | 5.0% |
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.