DuPont Decomposition
Why does ADANIPOWER earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
19.8% = 23.7% × 0.38 × 2.19
Latest: FY2026
Profitability
Net Margin
23.7%
17.7% →23.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.38x
0.34x →0.38x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.19x
4.38x →2.19x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 6.5 pp over 5 years. Driven by net margin improving (17.7% → 23.7%), leverage falling (4.38x → 2.19x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 17.7% | 0.34 | 4.38 | 26.3% |
| FY2023 | ₹0Cr | ₹0Cr | 28.2% | 0.44 | 2.87 | 35.9% |
| FY2024 | ₹0Cr | ₹0Cr | 41.6% | 0.54 | 2.14 | 48.3% |
| FY2025 | ₹0Cr | ₹0Cr | 23.0% | 0.50 | 2.00 | 23.0% |
| FY2026 | ₹0Cr | ₹0Cr | 23.7% | 0.38 | 2.19 | 19.8% |
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.