DuPont Decomposition
Why does ABCAPITAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
10.9% = 8.6% × 0.13 × 9.74
Latest: FY2026
Profitability
Net Margin
8.6%
6.7% →8.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.13x
0.18x →0.13x
Revenue per ₹ of assets
Leverage
Equity Multiplier
9.74x
9.11x →9.74x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~11%. Driven by net margin improving (6.7% → 8.6%), leverage rising (9.11x → 9.74x). 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 | 6.7% | 0.18 | 9.11 | 11.0% |
| FY2023 | ₹0Cr | ₹0Cr | 16.8% | 0.16 | 8.90 | 23.6% |
| FY2024 | ₹0Cr | ₹0Cr | 8.2% | 0.18 | 8.65 | 12.4% |
| FY2025 | ₹0Cr | ₹0Cr | 8.5% | 0.14 | 9.18 | 11.0% |
| FY2026 | ₹0Cr | ₹0Cr | 8.6% | 0.13 | 9.74 | 10.9% |
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.