DuPont Decomposition
Why does VOLTAS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.9% = 2.7% × 0.97 × 2.28
Latest: FY2026
Profitability
Net Margin
2.7%
6.4% →2.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.97x
0.80x →0.97x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.28x
1.77x →2.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.3 pp over 5 years. Driven by net margin declining (6.4% → 2.7%), asset turnover improving (0.80x → 0.97x), leverage rising (1.77x → 2.28x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.4% | 0.80 | 1.77 | 9.2% |
| FY2023 | ₹0Cr | ₹0Cr | 1.4% | 0.91 | 1.89 | 2.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.0% | 1.03 | 2.07 | 4.3% |
| FY2025 | ₹0Cr | ₹0Cr | 5.5% | 1.16 | 2.02 | 12.9% |
| FY2026 | ₹0Cr | ₹0Cr | 2.7% | 0.97 | 2.28 | 5.9% |
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.