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
11.7% = 5.3% × 1.55 × 1.42
Latest: FY2025
Profitability
Net Margin
5.3%
3.2% →5.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.55x
0.41x →1.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.42x
1.60x →1.42x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.5 pp over 3 years. Driven by net margin improving (3.2% → 5.3%), asset turnover improving (0.41x → 1.55x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.2% | 0.41 | 1.60 | 2.1% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 0.42 | 1.45 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 5.3% | 1.55 | 1.42 | 11.7% |
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.