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
5.5% = 9.9% × 0.40 × 1.38
Latest: FY2026
Profitability
Net Margin
9.9%
16.7% →9.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.40x
0.74x →0.40x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.38x
5.84x →1.38x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 66.2 pp over 5 years. Driven by net margin declining (16.7% → 9.9%), asset turnover declining (0.74x → 0.40x), leverage falling (5.84x → 1.38x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 16.7% | 0.74 | 5.84 | 71.8% |
| FY2023 | ₹0Cr | ₹0Cr | 26.6% | 0.82 | 1.23 | 26.7% |
| FY2024 | ₹0Cr | ₹0Cr | 24.5% | 0.63 | 1.21 | 18.8% |
| FY2025 | ₹0Cr | ₹0Cr | 15.6% | 0.44 | 1.28 | 8.7% |
| FY2026 | ₹0Cr | ₹0Cr | 9.9% | 0.40 | 1.38 | 5.5% |
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.