DuPont Decomposition
Why does ABFRL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-13.3% = -9.5% × 0.46 × 3.04
Latest: FY2026
Profitability
Net Margin
-9.5%
-1.3% →-9.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.46x
0.65x →0.46x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.04x
4.47x →3.04x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.4 pp over 5 years. Driven by net margin declining (-1.3% → -9.5%), asset turnover declining (0.65x → 0.46x), leverage falling (4.47x → 3.04x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -1.3% | 0.65 | 4.47 | -3.9% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.3% | 0.73 | 5.10 | -1.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -9.8% | 0.28 | 5.58 | -15.6% |
| FY2025 | ₹0Cr | ₹-0Cr | -5.1% | 0.44 | 2.44 | -5.5% |
| FY2026 | ₹0Cr | ₹-0Cr | -9.5% | 0.46 | 3.04 | -13.3% |
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.