DuPont Decomposition
Why does VIRINCHI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
0.1% = 0.3% × 0.28 × 1.79
Latest: FY2025
Profitability
Net Margin
0.3%
4.2% →0.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.28x
0.49x →0.28x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.79x
1.90x →1.79x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.7 pp over 4 years. Driven by net margin declining (4.2% → 0.3%), asset turnover declining (0.49x → 0.28x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.2% | 0.49 | 1.90 | 3.9% |
| FY2023 | ₹0Cr | ₹0Cr | 5.0% | 0.32 | 1.93 | 3.2% |
| FY2024 | ₹0Cr | ₹0Cr | 5.7% | 0.28 | 1.88 | 3.0% |
| FY2025 | ₹0Cr | ₹0Cr | 0.3% | 0.28 | 1.79 | 0.1% |
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.