DuPont Decomposition
Why does WELSPUNLIV earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.2% = 2.2% × 0.90 × 2.13
Latest: FY2026
Profitability
Net Margin
2.2%
7.2% →2.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.90x
0.88x →0.90x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.13x
2.38x →2.13x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 11.0 pp over 5 years. Driven by net margin declining (7.2% → 2.2%), leverage falling (2.38x → 2.13x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.2% | 0.88 | 2.38 | 15.1% |
| FY2023 | ₹0Cr | ₹0Cr | 2.8% | 0.83 | 2.12 | 4.9% |
| FY2024 | ₹0Cr | ₹0Cr | 7.9% | 0.90 | 2.11 | 15.1% |
| FY2025 | ₹0Cr | ₹0Cr | 6.1% | 1.02 | 2.14 | 13.3% |
| FY2026 | ₹0Cr | ₹0Cr | 2.2% | 0.90 | 2.13 | 4.2% |
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.