DuPont Decomposition
Why does AARTIDRUGS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.6% = 7.6% × 0.91 × 1.82
Latest: FY2026
Profitability
Net Margin
7.6%
8.2% →7.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.91x
1.13x →0.91x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.82x
2.13x →1.82x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 7.2 pp over 5 years. Driven by asset turnover declining (1.13x → 0.91x), leverage falling (2.13x → 1.82x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.2% | 1.13 | 2.13 | 19.8% |
| FY2023 | ₹0Cr | ₹0Cr | 6.2% | 1.12 | 2.03 | 13.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 1.03 | 1.90 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.0% | 0.93 | 1.88 | 12.3% |
| FY2026 | ₹0Cr | ₹0Cr | 7.6% | 0.91 | 1.82 | 12.6% |
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)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.