DuPont Decomposition
Why does AAVAS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.0% = 27.4% × 0.11 × 4.20
Latest: FY2026
Profitability
Net Margin
27.4%
32.0% →27.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.10x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.20x
3.93x →4.20x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~13%. Driven by net margin declining (32.0% → 27.4%), leverage rising (3.93x → 4.20x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 32.0% | 0.10 | 3.93 | 12.7% |
| FY2023 | ₹0Cr | ₹0Cr | 31.7% | 0.10 | 4.10 | 13.1% |
| FY2024 | ₹0Cr | ₹0Cr | 29.2% | 0.10 | 4.38 | 13.0% |
| FY2025 | ₹0Cr | ₹0Cr | 27.0% | 0.11 | 4.27 | 13.2% |
| FY2026 | ₹0Cr | ₹0Cr | 27.4% | 0.11 | 4.20 | 13.0% |
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.