DuPont Decomposition
Why does VSTL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.3% = 1.2% × 2.10 × 2.52
Latest: FY2025
Profitability
Net Margin
1.2%
1.4% →1.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.10x
3.29x →2.10x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.52x
3.45x →2.52x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.5 pp over 4 years. Driven by asset turnover declining (3.29x → 2.10x), leverage falling (3.45x → 2.52x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.4% | 3.29 | 3.45 | 15.7% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 3.79 | 3.15 | 22.6% |
| FY2024 | ₹0Cr | ₹0Cr | 1.6% | 2.80 | 2.16 | 10.0% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 2.10 | 2.52 | 6.3% |
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.