DuPont Decomposition
Why does ADANIENSOL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.0% = 8.3% × 0.30 × 3.65
Latest: FY2026
Profitability
Net Margin
8.3%
9.6% →8.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.30x
0.24x →0.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.65x
4.59x →3.65x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 1.7 pp over 4 years. Driven by net margin declining (9.6% → 8.3%), leverage falling (4.59x → 3.65x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 9.6% | 0.24 | 4.59 | 10.7% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.28 | 4.63 | 9.0% |
| FY2025 | ₹0Cr | ₹0Cr | 4.5% | 0.32 | 3.35 | 4.8% |
| FY2026 | ₹0Cr | ₹0Cr | 8.3% | 0.30 | 3.65 | 9.0% |
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.