DuPont Decomposition
Why does ABDL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.5% = 5.8% × 0.95 × 2.26
Latest: FY2025
Profitability
Net Margin
5.8%
0.1% →5.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
1.14x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.26x
5.56x →2.26x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 12.1 pp over 4 years. Driven by net margin improving (0.1% → 5.8%), asset turnover declining (1.14x → 0.95x), leverage falling (5.56x → 2.26x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 0.1% | 1.14 | 5.56 | 0.4% |
| FY2023 | ₹0Cr | ₹0Cr | 0.1% | 1.20 | 6.13 | 0.4% |
| FY2024 | ₹0Cr | ₹-0Cr | -0.1% | 0.67 | 6.48 | -0.6% |
| FY2025 | ₹0Cr | ₹0Cr | 5.8% | 0.95 | 2.26 | 12.5% |
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.