Kennametal Inc (KMT)
Return on equity (ROE)
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 93,125 | 109,323 | 118,459 | 144,623 | 54,434 |
| Total stockholders’ equity | US$ in thousands | 1,283,980 | 1,249,880 | 1,275,450 | 1,252,580 | 1,329,610 |
| ROE | 7.25% | 8.75% | 9.29% | 11.55% | 4.09% |
June 30, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $93,125K ÷ $1,283,980K
= 7.25%
The Return on Equity (ROE) of Kennametal Inc. has exhibited notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the company's ROE stood at 4.09%, indicating a relatively low level of efficiency in generating profits from shareholders' equity. This figure experienced a significant increase by June 30, 2022, reaching 11.55%, which suggests a substantial improvement in profitability or operational efficiency during that fiscal year.
However, by June 30, 2023, the ROE declined to 9.29%, reflecting a moderation in the company's ability to generate returns from its equity base. The downward trend persisted into the following year, with the ROE slightly decreasing further to 8.75% by June 30, 2024. This continued decline indicates potential challenges in maintaining the earlier elevated profitability levels.
Looking ahead, the projected ROE for June 30, 2025, is 7.25%, signifying a further reduction yet maintaining a modest level of equity-based profitability. The overall trend shows initial growth followed by a gradual decrease in ROE, which could be attributed to factors such as changing profit margins, equity base adjustments, or shifts in operational efficiency. This pattern warrants closer examination of underlying factors to assess the company's strategic direction and operational performance in relation to maintaining sustainable profitability levels.