DuPont Decomposition
Why does WELENT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.9% = 9.1% × 0.59 × 2.24
Latest: FY2025
Profitability
Net Margin
9.1%
16.9% →9.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.59x
0.14x →0.59x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.24x
3.29x →2.24x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 4.0 pp over 3 years. Driven by net margin declining (16.9% → 9.1%), asset turnover improving (0.14x → 0.59x), leverage falling (3.29x → 2.24x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 16.9% | 0.14 | 3.29 | 8.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.5% | 0.17 | 2.13 | 3.3% |
| FY2025 | ₹0Cr | ₹0Cr | 9.1% | 0.59 | 2.24 | 11.9% |
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.