DuPont Decomposition
Why does ABREL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-4.2% = -13.4% × 0.07 × 4.31
Latest: FY2025
Profitability
Net Margin
-13.4%
4.1% →-13.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.07x
0.53x →0.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.31x
2.08x →4.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.7 pp over 4 years. Driven by net margin declining (4.1% → -13.4%), asset turnover declining (0.53x → 0.07x), leverage rising (2.08x → 4.31x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.1% | 0.53 | 2.08 | 4.5% |
| FY2023 | ₹0Cr | ₹0Cr | 7.2% | 0.45 | 2.17 | 7.0% |
| FY2024 | ₹0Cr | ₹0Cr | 4.6% | 0.10 | 2.64 | 1.3% |
| FY2025 | ₹0Cr | ₹-0Cr | -13.4% | 0.07 | 4.31 | -4.2% |
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.