DuPont Decomposition
Why does VSSL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.6% = 7.0% × 1.07 × 1.28
Latest: FY2026
Profitability
Net Margin
7.0%
7.4% →7.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
1.49x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
1.66x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.6 pp over 5 years. Driven by asset turnover declining (1.49x → 1.07x), leverage falling (1.66x → 1.28x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.4% | 1.49 | 1.66 | 18.1% |
| FY2023 | ₹0Cr | ₹0Cr | 5.8% | 1.67 | 1.60 | 15.6% |
| FY2024 | ₹0Cr | ₹0Cr | 5.5% | 1.60 | 1.45 | 12.7% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.55 | 1.42 | 11.7% |
| FY2026 | ₹0Cr | ₹0Cr | 7.0% | 1.07 | 1.28 | 9.6% |
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.