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
12.3% = 7.1% × 0.92 × 1.88
Latest: FY2025
Profitability
Net Margin
7.1%
6.1% →7.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.92x
1.12x →0.92x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.88x
2.03x →1.88x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.7 pp over 3 years. Driven by asset turnover declining (1.12x → 0.92x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.1% | 1.12 | 2.03 | 13.9% |
| FY2024 | ₹0Cr | ₹0Cr | 6.8% | 1.04 | 1.90 | 13.4% |
| FY2025 | ₹0Cr | ₹0Cr | 7.1% | 0.92 | 1.88 | 12.3% |
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.