DuPont Decomposition
Why does ACI earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.7% = 15.6% × 0.43 × 1.28
Latest: FY2025
Profitability
Net Margin
15.6%
16.7% →15.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.43x
0.74x →0.43x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.28x
5.84x →1.28x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 63.1 pp over 4 years. Driven by net margin declining (16.7% → 15.6%), asset turnover declining (0.74x → 0.43x), leverage falling (5.84x → 1.28x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.7% | 0.74 | 5.84 | 71.8% |
| FY2023 | ₹0Cr | ₹0Cr | 35.7% | 0.22 | 1.23 | 9.5% |
| FY2024 | ₹0Cr | ₹0Cr | 20.3% | 0.14 | 1.21 | 3.4% |
| FY2025 | ₹0Cr | ₹0Cr | 15.6% | 0.43 | 1.28 | 8.7% |
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.