DuPont Decomposition
Why does A2ZINFRA earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
33.8% = 2.7% × 0.67 × 18.75
Latest: FY2025
Profitability
Net Margin
2.7%
-50.9% →2.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.67x
0.25x →0.67x
Revenue per ₹ of assets
Leverage
Equity Multiplier
18.75x
9.34x →18.75x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 151.5 pp over 4 years. Driven by net margin improving (-50.9% → 2.7%), asset turnover improving (0.25x → 0.67x), leverage rising (9.34x → 18.75x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -50.9% | 0.25 | 9.34 | -117.8% |
| FY2023 | ₹0Cr | ₹-0Cr | -35.2% | 0.35 | 34.48 | -427.8% |
| FY2024 | ₹0Cr | ₹-0Cr | -1.5% | 0.57 | 32.73 | -27.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.7% | 0.67 | 18.75 | 33.8% |
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.