DuPont Decomposition
Why does ABB earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
21.3% = 12.8% × 0.96 × 1.74
Latest: FY2026
Profitability
Net Margin
12.8%
12.0% →12.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.96x
0.94x →0.96x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.74x
1.85x →1.74x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~21%.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹0Cr | 12.0% | 0.94 | 1.85 | 20.9% |
| FY2025 | ₹0Cr | ₹0Cr | 15.5% | 0.98 | 1.75 | 26.4% |
| FY2026 | ₹0Cr | ₹0Cr | 12.8% | 0.96 | 1.74 | 21.3% |
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.