DuPont Decomposition
Why does ABCOTS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.2% = 3.5% × 1.03 × 2.60
Latest: FY2025
Profitability
Net Margin
3.5%
4.9% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.03x
1.69x →1.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.60x
2.13x →2.60x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.4 pp over 4 years. Driven by net margin declining (4.9% → 3.5%), asset turnover declining (1.69x → 1.03x), leverage rising (2.13x → 2.60x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.9% | 1.69 | 2.13 | 17.6% |
| FY2023 | ₹0Cr | ₹0Cr | 1.1% | 1.12 | 3.51 | 4.5% |
| FY2024 | ₹0Cr | ₹0Cr | 2.7% | 1.27 | 2.89 | 9.8% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 1.03 | 2.60 | 9.2% |
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.