DuPont Decomposition
Why does VMM earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.3% = 6.5% × 1.13 × 1.54
Latest: FY2026
Profitability
Net Margin
6.5%
3.6% →6.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.13x
0.68x →1.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.54x
1.70x →1.54x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.1 pp over 5 years. Driven by net margin improving (3.6% → 6.5%), asset turnover improving (0.68x → 1.13x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 3.6% | 0.68 | 1.70 | 4.2% |
| FY2023 | ₹0Cr | ₹0Cr | 4.3% | 0.91 | 1.61 | 6.2% |
| FY2024 | ₹0Cr | ₹0Cr | 5.2% | 1.05 | 1.51 | 8.2% |
| FY2025 | ₹0Cr | ₹0Cr | 5.9% | 1.07 | 1.56 | 9.9% |
| FY2026 | ₹0Cr | ₹0Cr | 6.5% | 1.13 | 1.54 | 11.3% |
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.