DuPont Decomposition
Why does WEL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
18.4% = 2.2% × 2.14 × 3.98
Latest: FY2025
Profitability
Net Margin
2.2%
3.7% →2.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.14x
0.63x →2.14x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.98x
3.91x →3.98x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 9.3 pp over 3 years. Driven by net margin declining (3.7% → 2.2%), asset turnover improving (0.63x → 2.14x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.7% | 0.63 | 3.91 | 9.2% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 0.74 | 4.01 | 7.4% |
| FY2025 | ₹0Cr | ₹0Cr | 2.2% | 2.14 | 3.98 | 18.4% |
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.