DuPont Decomposition
Why does VINYLINDIA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.7% = 2.5% × 2.80 × 1.79
Latest: FY2026
Profitability
Net Margin
2.5%
4.0% →2.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.80x
5.35x →2.80x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.79x
1.68x →1.79x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 23.6 pp over 5 years. Driven by net margin declining (4.0% → 2.5%), asset turnover declining (5.35x → 2.80x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.0% | 5.35 | 1.68 | 36.3% |
| FY2023 | ₹0Cr | ₹0Cr | 3.5% | 5.77 | 1.55 | 31.4% |
| FY2024 | ₹0Cr | ₹0Cr | 3.7% | 1.96 | 2.61 | 18.7% |
| FY2025 | ₹0Cr | ₹0Cr | 3.6% | 2.38 | 2.07 | 17.6% |
| FY2026 | ₹0Cr | ₹0Cr | 2.5% | 2.80 | 1.79 | 12.7% |
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.