DuPont Decomposition
Why does WCIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.9% = 3.8% × 1.56 × 1.33
Latest: FY2025
Profitability
Net Margin
3.8%
4.2% →3.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.56x
3.00x →1.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.33x
1.90x →1.33x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 15.9 pp over 4 years. Driven by asset turnover declining (3.00x → 1.56x), leverage falling (1.90x → 1.33x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.2% | 3.00 | 1.90 | 23.7% |
| FY2023 | ₹0Cr | ₹0Cr | 4.4% | 2.70 | 1.90 | 22.5% |
| FY2024 | ₹0Cr | ₹0Cr | 4.8% | 2.24 | 1.89 | 20.2% |
| FY2025 | ₹0Cr | ₹0Cr | 3.8% | 1.56 | 1.33 | 7.9% |
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.