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

17.6% = 9.6% × 0.82 × 2.23

Latest: FY2026

Profitability

Net Margin

9.6%

6.9% →9.6%

How much profit per ₹ of revenue

Efficiency

Asset Turnover

0.82x

0.69x →0.82x

Revenue per ₹ of assets

Leverage

Equity Multiplier

2.23x

2.07x →2.23x

Assets funded by equity vs debt

Trend Analysis

ROE improved by 7.7 pp over 5 years. Driven by net margin improving (6.9% → 9.6%), asset turnover improving (0.69x → 0.82x).

Historical Decomposition

Last 5 years

YearRevenuePATNet MarginAsset TOLeverageROE
FY20220Cr0Cr6.9%0.692.079.9%
FY20230Cr0Cr2.2%0.623.244.4%
FY20240Cr0Cr6.6%1.432.1119.8%
FY20250Cr0Cr13.7%0.922.0425.6%
FY20260Cr0Cr9.6%0.822.2317.6%

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)

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DuPont decomposition from audited annual financials. Factual analysis, not investment advice.

WELCORP DuPont Analysis — ROE 17.6% | YieldIQ