DuPont Decomposition
Why does VPRPL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.5% = 4.7% × 0.62 × 2.58
Latest: FY2025
Profitability
Net Margin
4.7%
5.7% →4.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.62x
1.58x →0.62x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.58x
3.14x →2.58x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 20.7 pp over 4 years. Driven by asset turnover declining (1.58x → 0.62x), leverage falling (3.14x → 2.58x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 5.7% | 1.58 | 3.14 | 28.3% |
| FY2023 | ₹0Cr | ₹0Cr | 7.8% | 1.41 | 2.62 | 28.8% |
| FY2024 | ₹0Cr | ₹0Cr | 8.3% | 0.95 | 2.14 | 16.9% |
| FY2025 | ₹0Cr | ₹0Cr | 4.7% | 0.62 | 2.58 | 7.5% |
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.