DuPont Decomposition
Why does WELCORP earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
24.7% = 14.3% × 0.87 × 1.97
Latest: FY2025
Profitability
Net Margin
14.3%
5.9% →14.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.87x
0.27x →0.87x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.97x
3.24x →1.97x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 19.6 pp over 3 years. Driven by net margin improving (5.9% → 14.3%), asset turnover improving (0.27x → 0.87x), leverage falling (3.24x → 1.97x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 5.9% | 0.27 | 3.24 | 5.1% |
| FY2024 | ₹0Cr | ₹0Cr | 6.4% | 0.38 | 2.11 | 5.1% |
| FY2025 | ₹0Cr | ₹0Cr | 14.3% | 0.87 | 1.97 | 24.7% |
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.