DuPont Decomposition
Why does VISHAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.0% = 1.9% × 1.59 × 1.97
Latest: FY2025
Profitability
Net Margin
1.9%
4.5% →1.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.59x
1.76x →1.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.97x
2.62x →1.97x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 14.6 pp over 4 years. Driven by net margin declining (4.5% → 1.9%), asset turnover declining (1.76x → 1.59x), leverage falling (2.62x → 1.97x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 1.76 | 2.62 | 20.6% |
| FY2023 | ₹0Cr | ₹0Cr | 3.4% | 1.77 | 2.22 | 13.5% |
| FY2024 | ₹0Cr | ₹0Cr | 1.5% | 1.55 | 2.24 | 5.1% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 1.59 | 1.97 | 6.0% |
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.