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
12.9% = 5.5% × 1.16 × 2.01
Latest: FY2025
Profitability
Net Margin
5.5%
4.8% →5.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.16x
0.29x →1.16x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.01x
1.89x →2.01x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 10.2 pp over 3 years. Driven by asset turnover improving (0.29x → 1.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.8% | 0.29 | 1.89 | 2.6% |
| FY2024 | ₹0Cr | ₹0Cr | 2.6% | 0.35 | 2.07 | 1.9% |
| FY2025 | ₹0Cr | ₹0Cr | 5.5% | 1.16 | 2.01 | 12.9% |
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.