DuPont Decomposition
Why does ACL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-83.2% = -15.2% × 0.31 × 17.59
Latest: FY2026
Profitability
Net Margin
-15.2%
-24.5% →-15.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.31x
0.25x →0.31x
Revenue per ₹ of assets
Leverage
Equity Multiplier
17.59x
3.64x →17.59x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 61.1 pp over 3 years. Driven by net margin improving (-24.5% → -15.2%), leverage rising (3.64x → 17.59x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2024 | ₹0Cr | ₹-0Cr | -24.5% | 0.25 | 3.64 | -22.1% |
| FY2025 | ₹0Cr | ₹-0Cr | -55.7% | 0.24 | 7.92 | -105.2% |
| FY2026 | ₹0Cr | ₹-0Cr | -15.2% | 0.31 | 17.59 | -83.2% |
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.