DuPont Decomposition
Why does WABAG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.4% = 9.4% × 0.64 × 2.38
Latest: FY2026
Profitability
Net Margin
9.4%
4.5% →9.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.64x
0.74x →0.64x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.38x
2.60x →2.38x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.8 pp over 5 years. Driven by net margin improving (4.5% → 9.4%), leverage falling (2.60x → 2.38x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.5% | 0.74 | 2.60 | 8.6% |
| FY2023 | ₹0Cr | ₹0Cr | 0.4% | 0.72 | 2.60 | 0.8% |
| FY2024 | ₹0Cr | ₹0Cr | 8.7% | 0.62 | 2.52 | 13.5% |
| FY2025 | ₹0Cr | ₹0Cr | 9.0% | 0.63 | 2.46 | 13.8% |
| FY2026 | ₹0Cr | ₹0Cr | 9.4% | 0.64 | 2.38 | 14.4% |
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.