DuPont Decomposition
Why does VTL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.1% = 7.5% × 0.71 × 1.32
Latest: FY2026
Profitability
Net Margin
7.5%
16.4% →7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.71x
0.86x →0.71x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.32x
1.43x →1.32x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 13.0 pp over 5 years. Driven by net margin declining (16.4% → 7.5%), asset turnover declining (0.86x → 0.71x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.4% | 0.86 | 1.43 | 20.1% |
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 0.88 | 1.32 | 9.3% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 0.78 | 1.32 | 6.9% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 0.79 | 1.26 | 8.9% |
| FY2026 | ₹0Cr | ₹0Cr | 7.5% | 0.71 | 1.32 | 7.1% |
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.