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
17.6% = 3.7% × 2.28 × 2.07
Latest: FY2025
Profitability
Net Margin
3.7%
6.8% →3.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.28x
0.61x →2.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.07x
1.55x →2.07x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.2 pp over 3 years. Driven by net margin declining (6.8% → 3.7%), asset turnover improving (0.61x → 2.28x), leverage rising (1.55x → 2.07x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.8% | 0.61 | 1.55 | 6.4% |
| FY2024 | ₹0Cr | ₹0Cr | 4.5% | 0.55 | 2.61 | 6.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.7% | 2.28 | 2.07 | 17.6% |
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.